Nigerian interbank rates flat, more cash flows expected

Nigeria's interbank lending rates were unchanged for the third straight weeks at 10.37 percent on Friday, supported by a large pool of naira liquidity and expected large cash flows in the coming weeks.
Traders said the central bank repaid 218 billion naira($1.32 billion) in matured open-market Operations bills this week. Expectations that monthly budgetary allocations will soon be disbursed to government agencies put the market in a comfortable position.
Although market liquidity opened with a cash balance of around 431 billion naira on Friday, lower than the 550 billion naira surplus last Friday, traders said more cash flow from budget allocations and planned retirement of about 978 billion naira at the end of October by the country's "bad" bank calmed the market.
"The expectation of additional cash flow from budget allocations next week, and AMCON's (Assets Management Company of Nigeria) plans to retire about 978 billion naira bonds by Oct. 31,helped to stabilise interest rate," one dealer said.
The open buy-back rate was flat at 10.25 percent this week, 1.75 basis points below the central bank's benchmark interest rate of 12 percent.
Overnight placements also remained flat at 10.50 percent for the third consecutive week.
Traders said state-owned energy company NNPC recalled a portion of its deposits with some banks to its account with the central bank this week, while cash flows to OMO bills and bond auctions led to reduction in system cash balance.