Nigerian interbank lending rates fell for the third week in a row to an average of 10.35 percent on Friday, from 11.83 percent last week, following the disbursal of August and September budgetary allocations to government agencies.
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| CBN HQ, Abuja |
Nigeria, Africa's second biggest economy, distributes revenue from oil exports among its three tiers of government on a monthly basis with the portion due to state and local governments passed through the banking system.
The market opened with a cash balance of about 847 billion naira on Friday, more-than double the 420 billion naira level it was on at this time last week.
The secured Open Buy Back (OBB) eased to 10.25 percent from 11.5 percent last week, 1.75 percentage points below the central bank's benchmark interest rate of 12 percent.
Overnight placement traded at 10.3 percent compared with 12 percent, while call money closed at 10.5 percent, against 12 percent last week.
Traders said an attempt by the central bank to soak up liquidity through the open market operations (OMO) debt was unsuccessful because banks were unhappy with the yield on it.
"We expect rates to remain unchanged at this level next week due to the level of liquidity in the system, but could they rise marginally if the central bank embarks on aggressive liquidity mopping up," one dealer said.
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