However, that was largely offset by the CBN’s auctions, which included N622.7bn from NTB sales and N712.5bn from OMO issuances, effectively tightening liquidity.
In a bid to further manage liquidity, the CBN raised its Monetary Policy Rate and Cash Reserve Ratio to 27.25 per cent and 50 per cent, respectively, constraining interbank lending by keeping a portion of bank deposits with the central bank.
It noted that despite those restrictive measures, system liquidity closed the month at N253.6bn, recovering from a negative position in August.
The CBN’s actions had notable effects on the money market, as the overnight policy rate and open buyback rates surged by 9.9 percentage points and 8.7 percentage points month-on-month, closing at 28.0 per cent and 28.7 per cent, respectively.
Afrinvest attributed that to increased demand for interbank funds amid the tightening monetary conditions.
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