BUSINESS Interbank rates rise on less liquidity
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)