Nigeria overnight lending rates up as CBN curbs liquidity

Whatsapp News

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

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

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

[pro_ad_display_adzone id=”10″]

“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 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.