Money market rates crash to 3-year low

The 7-day and 30-day NIBOR rates which stood at 10.68 percent and 12.65 percent respectively in 2005 fell to 6.5833 percent and 11.9917 percent as at September 25, 2007.

The Money Market Association said call rate was 5.983 percent, compared with the 7.0 percent obtained in 2005. The profile of rates in the money market during the period reflects monetary conditions.

Experts who spoke with BusinessDay explained that the inflow of funds from the Federation Account, Joint Venture Cash Call Payments, the disbursement of excess crude oil proceeds and the implementation of the new framework for monetary policy operations all helped to moderate interest rates and curtailed the volatility of inter-bank rates towards the end of the year.

Between 2005 and 2006, on a monthly basis, the weighted average inter-bank call rate, tenured rate, and the open-buy back rate averaged 7.38, 11.99, 9.20 percent in 2006 respectively, compared with 7.96 percent, 10.86 percent and 7.79 percent in 2005.

Also, between 2005 and 2006, NIBOR rates fell significantly when compared with the corresponding figures of 2005.The 7-day and 30-day NIBOR rates averaged 7.86 percent and 12.03 percent, respectively, on a monthly basis, down from 10.68 percent and 12.63 percent, respectively in 2005.

As for the weighted average inter-bank call rates, this rose from 7.0 percent in 2005 to 8.98 percent at end-December 2006.