Nigerian lending rates fall on ample naira cash

Nigerian interbank lending rates eased this week to an average of 14.25 percent, compared with 15 percent last week, supported by ample naira liquidity from matured Open Market Operations (OMO) notes and cash calls from joint oil ventures.

First Bank CEO, Onasanya

   Traders said about 85 billion naira ($525.99 million) in matured treasury bills was repaid by the central bank on Thursday, while an unspecified amount of cash call payments hit the financial system, boosting liquidity.
   "The market was up by about 161 billion naira at the open of the market today," one trader said.
   This compares with a 50 billion deficit last week.
   Traders said the central bank sold about 64 billion naira in fresh OMO debt notes on Friday in a bid to soak excess cash from the system, but the market remained sufficiently liquid to support transactions.
   The secured Open Buy Back (OBB) closed at 14 percent, compared with 15 percent last week, and 200 basis points above the central bank's benchmark interest rate.
   Overnight placement eased to 14.25 percent, against 15 percent, while call money closed at 14.5 percent, compared with 15 percent last week.
   Dealers said lending rates should edge lower next week in anticipation of the disbursal of August budgetary allocations to government agencies.
   "We see rates falling to around 11.5 percent across the board next with on the impact of sufficient liquidity in the system," another dealer said.