By Dickson Pat
Remita debit has widened liquidity balance in the financial system, heating up banks borrowing activities. The tight liquidity in the money market caused short term benchmark interest rate to climb again, with expectation that this will impact banks cost of funds.
The banking system deficit expanded by 12% to open at N572.77 billion, marking the fifth consecutive day of negative balance, TrustBanc Financial Group Limited said in a note, from N509 billion shortfall in the previous day.
Hence, the short-term benchmark interest rates expanded in the absence of significant inflows to upturn liquidity shortfall.
Information obtained from the FMDQ platform confirmed analysts positions that the Open Repo ,OPR, rate remained unchanged at 32.36%, while the Overnight ,O/N, rate edged up by 7bps to 32.86%.
Given little expectation of incoming funds tomorrow, we expect interbank rates will stay unchanged at their current levels, AIICO Capital Limited said in a note.
“Barring any significant inflow or refund, we expect the deficit in the system to linger while rates continue trading at elevated levels”, TrustBanc added.
