Nigerian interbank rates rise on central bank liquidity tightening

Nigerian interbank lending rates rose marginally to an average of 10.75 percent this week, from 10.5 percent last week, after central bank tightening measures reduced money supply.
   Traders said around 6.5 billion naira ($41 million) was withdrawn from banks this week to meet the regulator's cash reserve requirement (CRR) rules.
   The central bank hiked the CRR on public sector deposits to 50 percent, from 12 percent, in July in a bid to curb money laundering and speculation on the naira currency.
   The public sector makes up around a tenth of deposits in the banking sector.
   Traders said inflows of repaid matured open market operation debt notes of about 166 billion naira on Thursday helped to keep rates from rising further.
   The market opened with a cash balance of about 328 billion naira, slightly lower than the 475.58 billion naira last Friday.
  The open buy back rose to 10.50 percent on Friday, compared with 10.25 percent last week, 1.50 percentage points below the central bank's benchmark interest rate of 12 percent.
  Overnight placement closed at 10.75 percent, against 10.5 percent last week, while call money closed 11 percent, same level last week.
   "We expect the liquidity level to increase next week due to anticipated disbursement of November budget allocations to government agencies," one dealer said.