Nigerian interbank rates rise on tight liquidity

 Nigerian overnight lending rates fell to an average 25 percent on Friday from a record high of 95 percent last week after the central bank retired about 100 billion naira ($502.77 million) in Treasury bills, dealers said.
Traders said the repayment of matured Open Market Operation Treasury bills provided some liquidity in the market but not sufficient to lower the rates further because the cash was used up by banks to buy Treasury bills and foreign exchange.
The secured Open Buy Back and Overnight rates fell to 25 percent each from 95 percent previously.
Nigeria sold about 142 billion naira in Treasury bills with maturities ranging between 3-month and 1-year this week.
The state owned energy company NNPC recalled some of its deposits with banks, cutting back on the level of available liquidity for transactions in the system.
Banks' cash balance with the central bank stood at around 4.8 billion naira credit on Friday, compared with a deficit of around 25 billion naira on Monday, traders said.
"We expect an increase in cash flow into the system next week because of possible disbursal of budgetary allocation for January to government agencies, and rates should fall below the 20 percent level," one dealer said.
The currency of Africa's biggest economy - and the continent's top oil producer - has lost more than 20 percent in the past three months as oil prices collapsed and concern grew among investors about political stability after the six-week postponement of the Feb. 14 elections.