Nigeria’s interbank overnight lending rate rose for the second consecutive week on Friday to an average of 15 percent from 10 percent a week ago, as banks scrambled for liquidity to settle bond purchases.
The central bank sold N120 billion worth of local currency-denominated bonds with mixed yields compared with the returns from previous issues last month while payment for the debt sale was due on Friday.
Total banking system liquidity opened at N137.30 billion on Friday, but payment for bonds significantly reduced the level of cash in the market, leading to a sharp rise in the cost of borrowing among commercial lenders.
Traders said some banks actually quoted as high as 50 percent for overnight placement in early trade in their quest to get cash to pay for their bond purchases. But demand for cash dropped after the central bank refunded about N40 billion in cash reserve ratio to some banks.
http://www.fxmallam.com/wp-content/uploads/2016/09/LogoScopic.jpg00adminhttp://www.fxmallam.com/wp-content/uploads/2016/09/LogoScopic.jpgadmin2016-07-18 10:53:532016-07-18 10:53:53Interbank rate rises on bond purchases - Today.ng