Nigeria interbank rates slide as central bank retires treasury bills

Nigerian interbank lending rates fell to an average of 10.25 percent this week, compared with 12.41 percent last week, as the central bank kept its benchmark rate unchanged but paid off matured treasury bills, boosting liquidity.
The central bank kept its policy rate on hold at 12 percent for the 16th time in a row on Tuesday, as it sought to maintain a stable currency and historically low inflation in the face of "eroded fiscal buffers".
The bank sold 397 billion Nigerian naira ($2.5 billion) worth of open market securities (OMO) on Thursday to mop up liquidity, the same day it paid off 230 billion naira worth of matured treasury bills, cancelling the effect of the mop up, dealers said.
"We don't expect much change in the market next week unless central bank decides to sell more OMO bills," one dealer said.
Cash balance that lenders hold at the central bank was 411 billion naira on Friday, compared with 350 billion naira a week ago.
The open buy back (OBB) was flat at 10.25 percent, 1.75 percentage points below the central bank's benchmark rate of 12 percent. Overnight placement and call money each fell to 10.25 percent, against 12.50 percent each last week.