Meanwhile cost of funds is expected to remain low this week in the interbank money market due to expected inflow of N500 billion from matured secondary market (Open Market Operations, OMO) TBs.
Last week cost of funds dropped in response to inflow of N600 billion from matured OMO bills. The inflow outweigh the impact of outflow of N334.12 billion through sale of N45 billion worth of Nigeria Treasury Bills (NTB) and N289.12 worth of OMO bills by the CBN.
Consequently, the inflow aggravated the excess liquidity in the market and hence 25 basis points (bpts) decline in average short term cost of funds.
FMDQ showed that interest rate on Collateralised (Open Buy Back, OBB) lending dropped slightly by 22 bpts to 2.21 percent last week from 2.43 percent the previous week. Similarly, interest rate on Overnight lending dropped by 28 bpts to 2.79 percent from 3.07 percent the previous week