Nigeria interbank rates ease as cenbank pays off matured T. bills

Nigeria's interbank lending rates eased marginally to an average of 10.37 percent on Friday, down from 10.50 percent last week, after the government paid off open market treasury bills and retired matured bonds, dealers said.

The bank repaid about 308 billion naira ($1.88 billion) in matured open market bills, while the debt office retired 100 billion naira in matured bond this week, boosting liquidity and lowering the cost of borrowing among lenders.

The market opened with a cash balance of around 516 billion naira made up of government budgetary allocations, oil company cash call payments and matured open market bills, before it paid off treasury bills this week, dealers said.

Lenders' cash balance with the central bank opened in surplus of around 560 billion on Friday, compared to around 300 billion naira last week.

The open buy-back rate eased by 25 basis points to 10.25 percent this week compared with 10.50 percent last week, 1.75 basis points below the central bank's benchmark interest rate of 12 percent.

Overnight placements remained unchanged at 10.50 percent, the same level as last week.

Traders said rates should climb marginally next week with the central bank expected to enforce its cash reserve requirement on bank balances next week, while possible cash flow to foreign exchange purchases could also curb liquidity.