Nigeria's overnight interbank closes higher at 13 pct

Nigeria's overnight interbank lending rate closed at 13 percent on Thursday, down from the initial quote of 20 percent after fresh injection of cash call payment to joint crude oil production partners by government hit the banking system.
In early trade, the overnight lending rates was quoted at 20 percent after the central bank recalled some 400 billion naira ($2.02 billion) from the banking system to meet a new cash reserves ratio (CRR) on deposits.
On Tuesday, Nigeria's central bank raised its benchmark interest rate from 11 to 12 percent, and the cash reserve ratio for commercial banks to 22.5 percent from 20 percent, to try to curb rising inflation.
Traders said funds placers in the market were quoting between 20 and 25 percent for overnight placement, while takers are quoting between 7 and 10 percent," one dealer said, adding that no deals had yet been done on the rates being quoted.
"We have some deal done on overnight placement at 10 and 15 percent toward the close of the market," a senior dealer said.
Traders said the payment of cash call to joint oil production partners and expectations of additional cash from budgetary allocations to government agencies further gave the market a breather.
Overnight placement closed at 7.33 percent on Wednesday, while the Open Buy back (OBB) closed at 6.75 percent.
The total commercial lenders' credit balance with the central bank stood at 320.9 billion naira on Thursday, up from 217 billion naira last week.
The interbank rate reflects the level of naira cash liquidity in the banking system.

















Traders said there was additional cash outflow for premium payments to the Nigerian Deposit Insurance Corporation (NDIC), which further put pressure on liquidity in the system and forced lending rates up.