Banks’ opening position balance grows 2,173% to N411bn in two weeks in December



Uba Group

In the second half of December, banks’ opening position averaged N411.21bn, a 2,173 percent increase from the average position of N18.09 billion in the same period in November.

This was partly due to FAAC disbursements of N902.10 billion in December, which was a 22 percent increase from the sum of N736.78 billion disbursed in November.

Consequently, average short-term interbank rates fell by 318bps to 10.58 percent p.a in the review period from the average of 13.76 percent p.a in the second half of November.

During the review period, there was a net OMO outflow of N25 billion (OMO repayment of N5 billion and OMO sales of N30 billion).

Between December 16 and 30, there was only a Treasury Bill primary market auction, where a total sum of N67 billion was sold.

This was a decrease of 68.40 percent from the total sum of N213.43 billion sold in the second half of November. Primary market rates were down by an average of 140bps across all three tenors from their respective levels in the same period in November. In the secondary markets, yields on all the benchmark maturities were flat.

Similarly, rates on the I&E window averaged N456.58/$ within the review period (December 16th-30th). This is a 2.45 percent depreciation from the average of N445.65/$ in the second half of November. It traded within the band of N451.5/$-N461.67/$. The exchange rate slightly appreciated in the parallel market by 4.80 percent to an average of N742.77/$ when compared to the average of N780.27/$ in the same period in November.

Rates hovered around N737/$-747/$ in the parallel market.