Nigeria's interbank lending rates ease to 12 pct on liquidity boost

Nigeria's interbank lending rates slipped on Friday by 800 basis points to around 12 percent for overnight placement, following the retirement of about 415 billion naira ($2.32 billion) in matured treasury bills.
The overnight placement rose to 20 percent from 15 percent on Wednesday, draining about 568 billion naira from the banking system. The increase went to meet a 500-basis-point hike in cash reserve requirements (CRR) for lenders.
The central bank raised the CRR on private-sector deposits at its monetary policy committee meeting on Tuesday. It also raised interest rates by 100 basis points, the first change in more than two years.
Dealers said the cash flow resulting from repayment of matured open market operations (OMO) bills late on Thursday boosted liquidity in the market and cut the cost of borrowing among banks.
"After the debiting of the CRR on private-sector deposits on Wednesday ... the central bank repaid around 415 billion naira in matured treasury bills, boosting liquidity in the banking system and supporting lending among banks," one dealer said.
The secured open buyback (OBB) closed at 12 percent versus 20 percent on Wednesday. That was 100 basis points lower than the new central bank benchmark interest rate, 13 percent.
The overnight placement also closed at 12 percent versus 20 percent on Wednesday, traders said, compared with 10 percent last Friday.
Dealers said interbank rates may rise next week after the purchase of treasury bills and foreign exchange at the central bank auction.