Nigerian interbank rate eases on matured T-bills

CBN acting Governor, Alade

Nigerian interbank lending rates eased marginally to an average of 10.33 percent on Friday from 10.41 percent last week, driven by increased liquidity from the repayment of matured treasury bills, dealers said.
The cash balance that lenders hold at the central bank opened at 600.36 billion naira ($3.64 billion) surplus on Friday, compared with 527.21 billion naira last week, boosted by the repayment of matured treasury bills.
The central bank kept interest rates on hold for the 15th time in a row at 12 percent on Tuesday but hiked its cash reserves requirement on private sector deposits by 300 basis points to 15 percent.
"We expect the central bank to continue the conduct of OMO next week, but it will not change the position of the market significantly because of the high level of liquidity," one dealer said.
The central bank sold about 259 billion naira worth of OMO debt notes on Thursday and Friday, trader said. But the volume of repayments towards matured debt outpaced outflow on the OMO bills, leaving lending rates below the benchmark interest rate.
The secured Open Buy Back was unchanged at 10.25 percent, 1.75 percentage points below the central bank's benchmark rate of 12 percent.
The overnight placement eased to 10.25 percent, compared with 10.50 percent last week, while call money was unchanged at 10.50 percent, the same level as last week.
Traders said lending rates may however jump between April 8 and 9, when the central bank plans to debit lenders to enforce the hike in cash reserves requirement on private sector deposits.