Connect with us

Business

Nigerian interbank rate drops sharply

Published

on

Spread The News

 

Nigeria’s interbank overnight lending rate fell sharply on Friday to an average of 12 percent from around 60 percent a week ago after the Central bank of Nigeria repaid matured treasury bills and a refund of excess cash deposited by banks to buy dollars.

The CBN sold $100 million at its special intervention auction in the foreign exchange market on Tuesday, which was less than the amount requested by banks, leading to a refund of the excess deposited by banks on Friday.

The regulator also injected about 168 billion naira in matured open market operation (OMO) treasury bills into the system on Thursday, raising money market liquidity levels.

“The interbank rate is seen climbing again next week as the central bank resumes its aggressive liquidity mop up and sustains its intervention in the forex market,” one senior currency trader said.

ALSO SEE: What Dangote does that keeps Adenuga, Otedola, Alakija, others far down on Forbes Africa rich list

The overnight lending rate jumped last week to as high as 100 percent intraday after the central bank tightened liquidity to support the naira currency.

The regulatory bank has consistently issued OMO treasury bills to reduce excess liquidity in the money market and curb speculation on the local currency.

The central bank sold a total of 68.79 billion naira worth of treasury bills on Friday in its bid to further tighten liquidity in the banking system.

The bank’s sales on Friday amounted to 65.5 billion naira of 363-day open OMO treasury bills at 18.55 percent, and 3.29 million naira of the 174-day paper at 17.95 percent.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Trending