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Sunday 27 April 2014

Nigerian lending rates flat on ample liquidity

Nigerian interbank lending rates held steady for the fifth week in a row on Friday at an average of 10.5 percent, reflecting increased liquidity in the banking system.
Dealers said payments to government agencies and cash from maturing treasury bills had boosted market liquidity.
The cash balance that lenders hold at the central bank opened at a surplus of 767 billion naira on Friday, up from 278 billion naira last week.
The secured Open Buy Back was unchanged for the fifth consecutive week at 10.25 percent, 1.75 percentage points below the central bank's benchmark rate of 12 percent.
Overnight placement and call money were also unchanged at 10.5 percent and 10.75 percent respectively.
The cost of funds in the interbank market should remain stable around the same level next week, dealers said, unless the central bank embarks sells treasury bills to reduce liquidity in the banking system.

"We don't expect any major change in interest rates next week due to the level of liquidity," one dealer said. 

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