The value of commercial paper (CP), an unsecured short-term debt instrument held by banks rose by 94.1 per cent to N29.1 billion at the end of the third quarter of 2013, compared with N15 billion at the end of the preceding quarter, a report has shown.
The Central Bank of Nigeria (CBN) economic report for the third quarter of 2013, which revealed this, attributed the development to the increase in holding of CP by the banks during the review period.
Thus, CP constituted 0.44 per cent of the total value of money market assets outstanding, compared with 0.23 per cent at the end of the preceding quarter.
On the other hand, the report showed the value of bankers' acceptance (BA), a short-term debt instrument issued by a firm that is guaranteed by a commercial bank increased by 53.2 per cent to N24.5 billion at the end of the review quarter, compared with an increase of 58.1 per cent at the end of the preceding quarter.
The development, it stated reflected an increase in investment in BA by the banks. Consequently, it stated that BA accounted for 0.37 per cent of the total value of money market assets outstanding at
the end of the review quarter, compared with 0.24 per cent at
the end of the preceding quarter.
The report also indicated mixed developments in banks' deposit and lending rates during the third quarter of 2013. With the exception of the average savings deposit rate, which rose to 2.44 per cent from 2.04 per cent in the second quarter of 2013, all other rates on deposits of various maturities fell from a range of 5.69 – 7.72 per cent to a range of 4.92 – 7.55 per cent in the third quarter of 2013.
Similarly, at 6.42 per cent, the average term deposit rate fell by 0.15 per cent point below the level in the preceding quarter. The prime and maximum lending rates fell by 0.01 and 0.35 per cent points to 16.61 and 24.21 per cent, respectively, in the third quarter of 2013.
Consequently, the spread between the weighted average term deposit and maximum lending rates narrowed by 0.20 per cent point to 17.79 per cent from 17.98 per cent in the preceding quarter.
"The margin between the average savings deposit and the maximum lending rates, also narrowed by 0.76 percentage point to 21.77 per cent from 22.52 per cent. With the headline inflation rate at eight per cent at end-September 2013, all rates, with the exception of the lending rates, were negative in real terms.
"At the interbank funds segment, the weighted average interbank call rate, which stood at 11.69 per cent at the end of the second quarter of 2013, rose by 2.34 percentage points to 14.03 per cent in the third quarter of 2013, reflecting the liquidity condition in the banking system," it stated further.