Business
Overnight lending rate relaxes on expected fresh funds
Nigeria’s overnight lending rate eased to 12 percent on Friday compared with 15 percent at the start of the week, as commercial lenders anticipated fresh inflows from state bodies.
Some February budget allocations and payments ordered by President Muhammadu Buhari for federal states to pay delayed public salaries are expected to hit the banking system next week, helping to boost liquidity in the money market.
Traders said the market opened on Friday with a cash balance of 21.28 billion naira ($69.60 million) against a deficit of about 9 billion naira last week.
Nigeria issued more bonds and treasury bills at auctions this week than initially planned, draining some liquidity, though traders said there was still enough money in the system to support current lending rates.
The naira firmed on the black market on Friday to 450 to the dollar compared with 455 previously, and traded at 306.50 to the dollar on the official interbank window, from 306.75 on Thursday.
The naira was boosted by increased dollar sales by the central bank to meet both corporate and individual hard currency needs via the official window, which has gained in importance since the central bank devalued the retail rate last month.
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