Inter-bank rates rise in spite of release of statutory allocation
Inter-bank offer rates (NIBOR) were on the increase last week inspite of the statutory allocation for the month of December by the Federal Allocation Account Committee (FAAC).
But the FSDH Weekly attributed the tightness in the market to huge withdrawals amounting to N187.40 billion from the system.Analysts say they anticipate that the tightness in the market during the week may ease as maturing bills worth about N34 billion and the effect of the December allocation from the Federal Allocation Account Committee (FAAC) are expected to be felt more in the system.Consequently, we expect inter-bank rates to drop marginally during the week," said FSDH.
The 7-day NIBOR increased throughout the week, in spite of the December allocation, to close at 10.33 percent, from the previous week's figure of 8.92 percent.The 90-day NIBOR on the other hand, dipped marginally towards the end of the week, closing the week at 13.10 percent, from the previous week's figure of 13.13 percent.At the 91-day Treasury bill auction, a total of N5 billion worth of bill was offered, N4.18 billion was subscribed, and total allotment was N4.18 billion at a discount rate of 8.5 percent, a 9basis point increase from the previous week's rate of 7.6 percent. A total of N5billion worth of matured bills was repaid into the system; this resulted in a total inflow of N815million into the system.At the 182-day Treasury bill auction, the CBN offered a total of N100 billion worth of bills, while they sold N100 billion. A total of N4.87 billion worth of bills was initially allotted, while N95.34billion was underwritten by Money Market Dealers (MMDs). The discount rate applied was 8.75 percent up by five basis point from the previous week's figure of 8.25 percent. A total of N10 billion worth of matured bills was repaid into the system. This led to a total outflow of N90 billion from the system.
At the secondary segment of the government securities market, bills worth N115billion with tenor days ranging from 48-318days were offered. Out of which a total of N16.5 billion worth of bills was initially allotted while a total of N98.5 billion was underwritten by MMDs. A total of N17 billion matured bills was repaid, leading to a total outflow of N98 billion from this segment of the market.The bills were issued at discount rates ranging from 8.50 percent to 9.93 percent from the previous week's range of 7.50 percent to 8.50 percent.
There was no action at the foreign exchange auctions last week, probably due to the public holiday declared during the week by the Federal government. The marginal rate in the sale of the foreign exchange was N116.80/$1 same as the previous week. The value of the naira remained stable in the parallel and official markets while it depreciated marginally in the inter-bank market. In the parallel and official markets, the value of the naira stood at N120/$1 and N116.80/$1 same as the previous week's figures respectively. In the inter-bank market, the value of naira depreciated very marginally by 1kobo to close the week at N118.09/$1 from the previous week's figure of N118.08/$1.
At the foreign exchange market, it is expected that the value of naira will continue its steady appreciation as a result of the county's favourable balance of payment position, and the lower demand pressure on foreign exchange as a result of the yuletide season.
But the FSDH Weekly attributed the tightness in the market to huge withdrawals amounting to N187.40 billion from the system.Analysts say they anticipate that the tightness in the market during the week may ease as maturing bills worth about N34 billion and the effect of the December allocation from the Federal Allocation Account Committee (FAAC) are expected to be felt more in the system.Consequently, we expect inter-bank rates to drop marginally during the week," said FSDH.
The 7-day NIBOR increased throughout the week, in spite of the December allocation, to close at 10.33 percent, from the previous week's figure of 8.92 percent.The 90-day NIBOR on the other hand, dipped marginally towards the end of the week, closing the week at 13.10 percent, from the previous week's figure of 13.13 percent.At the 91-day Treasury bill auction, a total of N5 billion worth of bill was offered, N4.18 billion was subscribed, and total allotment was N4.18 billion at a discount rate of 8.5 percent, a 9basis point increase from the previous week's rate of 7.6 percent. A total of N5billion worth of matured bills was repaid into the system; this resulted in a total inflow of N815million into the system.At the 182-day Treasury bill auction, the CBN offered a total of N100 billion worth of bills, while they sold N100 billion. A total of N4.87 billion worth of bills was initially allotted, while N95.34billion was underwritten by Money Market Dealers (MMDs). The discount rate applied was 8.75 percent up by five basis point from the previous week's figure of 8.25 percent. A total of N10 billion worth of matured bills was repaid into the system. This led to a total outflow of N90 billion from the system.
At the secondary segment of the government securities market, bills worth N115billion with tenor days ranging from 48-318days were offered. Out of which a total of N16.5 billion worth of bills was initially allotted while a total of N98.5 billion was underwritten by MMDs. A total of N17 billion matured bills was repaid, leading to a total outflow of N98 billion from this segment of the market.The bills were issued at discount rates ranging from 8.50 percent to 9.93 percent from the previous week's range of 7.50 percent to 8.50 percent.
There was no action at the foreign exchange auctions last week, probably due to the public holiday declared during the week by the Federal government. The marginal rate in the sale of the foreign exchange was N116.80/$1 same as the previous week. The value of the naira remained stable in the parallel and official markets while it depreciated marginally in the inter-bank market. In the parallel and official markets, the value of the naira stood at N120/$1 and N116.80/$1 same as the previous week's figures respectively. In the inter-bank market, the value of naira depreciated very marginally by 1kobo to close the week at N118.09/$1 from the previous week's figure of N118.08/$1.
At the foreign exchange market, it is expected that the value of naira will continue its steady appreciation as a result of the county's favourable balance of payment position, and the lower demand pressure on foreign exchange as a result of the yuletide season.
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