Nigerian interbank rates flat, but seen rising on CRR

Nigerian interbank lending rates were unchanged at an average of 10.75 percent on Friday, but seen rising next week in anticipation of a cash withdrawal by the central bank for the Cash Reserves Requirement (CRR) debiting for October.

Nigerian naira

Traders said lending rates remained flat this week because of idle cash in the vaults of banks and an aggressive mopping up exercise by the regulator to reduce money supply in the system.
The central bank sold over 264 billion naira ($1.66 billion) worth in its open market operation (OMO) debt notes this week in a bid to curb excess liquidity, but traders said over 100 billion naira in matured bills also hit the market.
The market opened with a cash balance of about 522 billion on Friday, slightly lower than 535 billion balance last week.
"The market remains sufficiently liquid to support lending rates at this level, but the trend could change next week when CRR for October is debited," one dealer said.
Nigeria increased CRR on public sector deposits with banks to 50 percent, from a previous 12 percent, in July. The move aimed to curb the money supply and inflation in Africa's second biggest economy.
The secured Open Buy Back was flat at 10.5 percent, 1.5 percentage points below the central bank's benchmark interest rate of 12 percent.  
Overnight placement and call money traded at 10.75 percent, 11 percent, each, same as last week.