BUSI­NESS In­ter­bank rates rise on less liq­uid­ity

Daily Trust - - BANKING -

In­ter­bank lend­ing rates inched up slightly to an aver­age of 10.5 per­cent Fri­day, last week, from 10.33 per­cent driven by the sale of govern­ment bills to soak up liq­uid­ity, deal­ers said.

The cash bal­ance that lenders held at the cen­tral bank opened at 494 bil­lion naira ($3.0 bn) sur­plus on Fri­day, down from 600.36 bil­lion naira ear­lier, af­ter the cen­tral bank sold OMO bills to curb liq­uid­ity.

Deal­ers ex­pected the cen­tral bank, which hiked the cash re­serves re­quire­ment (CRR) on pri­vate sec­tor de­posits by 300 ba­sis points to 15 per­cent two weeks ago, to debit lenders next week to en­force the new re­quire­ment.

“We ex­pect the CRR debit next week to drain liq­uid­ity,” one dealer said, adding that cen­tral bank will also re­pay some ma­tured trea­sury bills but the net ef­fect will be lower liq­uid­ity.

The se­cured Open Buy Back was un­changed for two weeks in a row at 10.25 per­cent, 1.75 per­cent­age points be­low the cen­tral bank’s bench­mark rate of 12 per­cent.

The overnight place­ment rose to 10.5 per­cent, com­pared with 10.25 per­cent, last week, while call money climbed to 10.75 per­cent, from 10.50 per­cent last week. ( Reuters)

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