By Alex C
Interbank lending rates climbed to 10.62 percent this week, up 0.12 basis point from a week earlier, after the central bank issued a larger amount of treasury bills than those that were maturing, dealers said on Friday.
The Central Bank of Nigeria (CBN) issued N234 billion ($1.44 billion) worth of Open Market Operation bills on Friday to replace a N200 billion bill it paid off the previous day, curbing liquidity, they said.
The cash balance that lenders hold at the central bank was N204.37 billion on Friday, compared with 263.49 billion last week, the regulator said on its website. Lenders have been unable to see the level of their cash balances with the central bank for more than two months due to a system glitch.
The open buy-back rate was unchanged at 10.5 percent, 1.5 basis points below the CBN’s benchmark interest rate of 12 percent. Overnight placements however climbed marginally to 10.75 percent from 10.5 percent last week.
But dealers see interbank markets awash with cash next week, owing to the disbursement of the country’s oil proceeds for the month of August to the different tiers of government.