Nigerian interbank rates ease on OMO bill maturity

CBN gov, Emefiele

Nigeria's interbank lending rates eased to an average of 10.37 percent on Friday, from 11.12 percent last week, driven by retirement of matured Open Market Operation (OMO) bills of about 155 billion naira ($950 million) by the central bank.
Traders said the increased liquidity outweighed cash outflow from the system, helping to bring down cost of borrowing among banks.
But traders said rates are seen inching up next week with expected cash outflows for bond and foreign exchange purchases and lack of access by banks to their credit balance at the central bank.
Technical glitches at the central bank have prevented banks from accessing to their balances with the regulator in the last four weeks, putting most dealers in the dark about the volume of liquidity available in the market to trade with.
"We presently trade blindly because we don't have information on the level of liquidity in the market and this will particularly impact on the direction of rates next week," one dealer said.
The open buy-back (OBB) eased to 10.25 percent, from 11 percent last week, 1.75 basis points below the central bank's benchmark interest rate of 12 percent.
Overnight placements also fell to 10.50 percent against 11.25 percent last week.
Nigeria plans to raise 100 billion naira worth in bonds with maturities ranging between 3 years and 20 years at an auction next Wednesday.