Nigerian interbank rates falls after AMCON retires bonds

Nigeria's interbank lending rates eased to 10.2 percent on average on Friday, from 10.37 percent last week after state-owned 'bad bank' AMCON repaid matured bonds, buoying liquidity in the system, traders said.
Nigeria's state-backed AMCON repaid 867 billion naira ($5.24 billion) worth of bonds on Friday, cutting its liabilities to around 3 trillion naira, bankers said.
Dealers said 30 percent of the repaid bond -- about 260 billion naira -- was expected to enter the system in the form of cash on Friday, while the balance would be in treasury bills, transferring that part of the liability to the central bank.
Dealers said the central bank had also repaid around 160 billion naira in matured treasury bills, while around 320 billion naira in monthly budget allocations to government agencies hit the market this week, further buoying liquidity.
The cash balance that lenders held at the central bank opened around 552 billion naira on Friday, compared with 389 billion naira last week.
The open buy back rate eased to 10.15 percent from 10.25 percent last week -- 1.85 basis points below the central bank's benchmark interest rate of 12 percent.
Overnight placements also fell to 10.25 percent from 10.50 percent last week.
Dealers said interbank lending rates were expected to remain stable at this level next week, with market liquidity set to rise further after the payment of the AMCON bond is reflected on bank balances held at the central bank on Monday.