Nigerian interbank rates slip as banks accumulate cash

Nigeria's interbank rate eased on Friday to an average of 0.5 percent for overnight lending, down from to 1.25 last week, supported by ample naira liquidity.
The central bank injected around 240 billion naira ($1.21 billion) in matured open market operation (OMO) treasury bills and refunds on cash reserves to some banks on Thursday, boosting liquidity and forcing down the cost of borrowing among banks.
As of Wednesday, commercial lenders had a combined credit balance with the central bank of 312 billion naira, and liquidity was expected to rise further with the funds from the retired bill and refunds from the surplus cash deposited for forex purchases.
The secured Open Buy Back (OBB) also fell to 0.50 percent from 1 percent last week.
Nigeria's interbank rate mirrors the level of naira cash liquidity in the banking system.
"We see rates rising marginally early next week because anticipated sales of OMO bills by the central bank to mop up excess liquidity in the system," one dealer said.