Nigerian interbank rates fall back on matured T-bills

Nigerian interbank lending rates eased to an average of 15 percent on Friday, from a record high of about 44 percent on Tuesday, bankers said, softened by cash flows from matured open market operations (OMO) bills.

Nigeria naira and dollar

   Traders said about 70 billion naira ($433.84 million) in matured treasury bills hit the financial system on Thursday, while some lenders were able to rediscount their debt holdings at the central bank repo window to obtain cash.
   "There was major liquidity relief on Thursday when about 70 billion naira in matured bills and some funds from government agencies came in," one dealer said. "That sent rates crashing".
   Lending rates among banks had hit 44 percent on Tuesday, as state backed "bad bank' AMCON prepared to withdraw about 100 billion naira in an annual levy from the system.
   "The market was short by around 50 billion naira today after debiting for foreign exchange purchases by the central bank, but some banks were able to rediscount treasury bills for cash, which eased liquidity," another dealer said.
   The Secured Open Buy Back (OBB), overnight placement and call money closed flat at 15 percent, compared with an average of 44 percent on Tuesday and 26 percent on Friday a week ago.
   Dealers said expected cash flows from budgetary allocations to government agencies and additional T-bill repayments would put further downward pressure on rates next week.