Rates Herald Week With Sharp Drop

There was a significant drop in the money market rates in Nigeria at the first trading day of this week on Monday.
The Open Buy Back (OBB) and the Overnight rates depreciated by about 15 percent.
Specifically, while the OBB rate went down to 3.67 percent from 17.17 percent, the overnight rate dropped to 4.42 percent from 19.67 percent in the previous session.
The decline occurred as system liquidity improved significantly to about 250 billion positive following inflows from FAAC Payments into the system.
Analysts at Zedcrest Capital expect the rates to remain moderated, even as the market anticipate inflows from the N300 billion FGN 30-May-2018 bond maturity including N16 billion in final coupon payments.
However, the likely OMO auction by the Central Bank of Nigeria (CBN) is expected to moderate the excess liquidity in the system.

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