Cost of funds is expected to moderate downward this week, in response to inflow of N177 billion from matured Treasury Bills.

This expectation is however predicated on reduced or zero liquidity mop-ups by the Central Bank of Nigeria.

Last week, the apex bank mopped up N364.2 billion from the interbank money market through issuance of Open Market Operations.

This comprised N116.2 billion OMO bills sold on Monday and N248 billion OMO bills sold on Friday. In addition, the apex bank sold primary market TBs worth N54 billion during the week, hence the market experienced N418.2 billion outflow through TBs.

This, as well as outflow to fund dollar purchases cancelled out the impact of N259 billion inflows through matured TBs. As a result, average short term cost of funds rose by 1,250 basis points when compared to the level in the previous week.