Nigeria’s interbank lending rates held steady at 8.25 per cent on average, last week, on ample naira liquidity after the Central Bank of Nigeria (CBN) declined to borrow funds at higher yields through its Open Market Operations (OMO) bills from commercial lenders. “The market has been very liquid this week because the central bank refused to sell OMO bills,” a dealer told Reuters.
The lenders’ balance with the apex bank stood at N261 billion in credit last Friday, boosted by about N114 billion in matured treasury bills repaid last Thursday. The banking watchdog usually sells treasury bills in the secondary market to mop-up perceived excess liquidity from the banking system.
The secured Open Buy Back (OBB) remained unchanged at eight per cent, while overnight placement was also stable at the same level as last week, 8.5 per cent. “We see rates inching up gradually by this week as the central bank moves to tighten liqu idity,” another dealer said. Dealers said the CBN may resort to debiting banks for cash reserve requirements (CRR) to cover for the last four week of arrears in its bid to reduce liquidity.
