Nigerian interbank rates fall on budget inflows, OMO maturities

Nigeria's interbank lending rates eased to an average of 10.5 percent on Friday, compared with 12 percent last week, driven by increased cash inflows from budgetary allocations and retirement of matured Open Market operations (OMO) bills.
Nigeria distributed revenue from oil exports among its three tiers of government - federal, state and local this week. Some 260 billion naira ($1.61 billion) making up the portion to states and local governments hit the money market this week.
Traders said an additional 135 billion naira in matured OMO bills was also repaid on Thursday, which further swelled liquidity in the market and drove down cost of borrowing.
The open buy-back (OBB) eased to 10.5 percent, from 11.75 percent last week, 1.5 basis points below the central bank's benchmark interest rate of 12 percent.
Overnight placements also fell to 10.5 percent from 12.25 percent last week.
"Rates will remain flat next week going by the level of liquidity in the market presently, unless the central bank embarks on an aggressive mopping up exercise," one dealer said.