Cost of funds to decline as N311.38bn hit interbank market
ON APRIL 27, 20202:05 AMIN BUSINESS
By Babajide Komolafe
THE inflow of N311.38 billion into the interbank money market this week is expected to prompt a decline in cost of funds in contrast to the sharp increase recorded last week.
Cost of funds rose by over 1,800 basis (bpts) last week following sharp decline in market liquidity to N550 billion on Friday from over N1 trillion on Thursday. The decline in market liquidity was caused by outflow on Friday for FGN bond purchase (N156 billion), and secondary market (Open Market Operations, OBB) treasuring bills purchase of N122.65 billion.
Consequently, interest rate on Collateralised (Open Buy Back, OBB) lending spiked by 1,833 bpts to 20.33 percent on Friday from two percent the previous week. Similarly, interest rate on Overnight lending rose sharply by 1,883 bpts to 21.08 percent from 2.25 percent the previous week.
Source:https://www.vanguardngr.com/2020/04/cost-of-funds-to-decline-as-n311-38bn-hit-interbank-market/
ON APRIL 27, 20202:05 AMIN BUSINESS
By Babajide Komolafe
THE inflow of N311.38 billion into the interbank money market this week is expected to prompt a decline in cost of funds in contrast to the sharp increase recorded last week.
Cost of funds rose by over 1,800 basis (bpts) last week following sharp decline in market liquidity to N550 billion on Friday from over N1 trillion on Thursday. The decline in market liquidity was caused by outflow on Friday for FGN bond purchase (N156 billion), and secondary market (Open Market Operations, OBB) treasuring bills purchase of N122.65 billion.
Consequently, interest rate on Collateralised (Open Buy Back, OBB) lending spiked by 1,833 bpts to 20.33 percent on Friday from two percent the previous week. Similarly, interest rate on Overnight lending rose sharply by 1,883 bpts to 21.08 percent from 2.25 percent the previous week.
Source:https://www.vanguardngr.com/2020/04/cost-of-funds-to-decline-as-n311-38bn-hit-interbank-market/
