Nigeria overnight lending rates up as CBN curbs liquidity

Whatapp News

LAGOS (Reuters) – Nigeria’s overnight lending rates rose to an average of 12.5 percent on Friday, compared with 9 percent last week, after the central bank drained cash from the money market.

The central bank debited commercial lenders 58.2 billion naira ($293 million) to enforce its Cash Reserve Requirement (CRR) and another 306 billion naira ($1.5 bln) to fund Treasury bill purchases, curbing liquidity.

The central bank debits lenders twice in a month to enforce its CRR rule, which requires banks set aside cash with the regulator against its public and private deposits.

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“Rates shot up… to an average of 15 percent when the CRR was debited, but later eased as cash for government workers hit the market,” one dealer said.

The secured Open Buy Back (OBB) rose to 12 percent from 9 percent last week. The secured fund was one percentage points below the 13 percent central bank’s benchmark interest rate.

Overnight placement also rose to 13 percent against 9 percent last week.

Whatapp News




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