Nige­ria in­ter­bank rate rises on bond pur­chases

Daily Trust - - BUSINESS - From Sun­day Michael Ogwu, La­gos

Nige­ria’s in­ter­bank overnight lend­ing rate rose for the sec­ond con­sec­u­tive week on Fri­day to an av­er­age of 15 per cent from 10 per cent as banks scram­bled for liq­uid­ity to set­tle bond pur­chases.

Nige­ria sold N120bn worth of lo­cal cur­rency-de­nom­i­nated bonds with mixed yields com­pared with the re­turns from pre­vi­ous is­sues last month while pay­ment for the debt sale was due on Fri­day.

Ac­cord­ing to Reuter’s re­port, to­tal bank­ing sys­tem liq­uid­ity opened at N137.30bn on Fri­day, but pay­ment for bonds sig­nif­i­cantly re­duced the level of cash in the mar­ket, lead­ing to a sharp rise in the cost of bor­row­ing among com­mer­cial lenders.

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