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Interest rates rise as banks, naira dealers scramble for funds
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Mixed outlook as cost of funds defies N515bn inflow
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Views: Visits 7 By Babajide Komolafe Cost of funds in the interbank money market rose to 19.2 per cent last week, defying N515 billion inflow during the week. The inflow comprised N110 billion from matured secondary market (Open Market Operations, OMO) treasury bills, N14.91 billion from FGN Bond Coupon payment and statutory allocation of N390 billion from Federation Accounts Allocation Committee (FAAC) to the state. READ ALSOConfession video of ESN member: Nnamdi Kanu is 419, he should lead from Nigeria The impact of the inflow was, however, cancelled by outflow comprising N87.95 billion through Nigerian Treasury Bills (NTB) issuance, N41 billion through OMO bills auction, debit for Cash Reserve Ratio (CRR) and foreign exchange auction.
Cost of funds hits 2yrs high
By Babajide Komolafe
In apparent reflection of the intense scarcity of funds that prevailed in the interbank money market in April, banks’ borrowing from the Central Bank of Nigeria (CBN) rose by 174 per cent to N2.48 trillion from N904.6 billion in March. The banks’ deposits with CBN also declined significantly.
Banks borrow from the CBN through its Standing Lending Facility (SLF) to fund short term liquidity cash shortfall. They, however, deposit their idle cash in the apex bank’s Standing Deposit Facility (SDF).
Financial Vanguard findings in the CBN’s data release show that while banks’ borrowing through the SLF rose sharply by 174 per cent in April, their deposits with the apex bank through the SDF fell by 57 per cent to N169.74 billion in April from N392.37 billion in March.
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