LAGOS Oct 28 (Reuters) – Nigeria’s central bank sold about 51 billion naira ($168 million) worth of treasury bills on Friday to mop up liquidity as the overnight lending rate traded flat around 10 percent, traders said.
The bank sold 25 billion naira of 174-day open market operation bills at 18 percent and 26 billion naira of the 364-day paper at 18.5 percent at an auction of Friday.
That brings the total of debt sales this week to 370.67 billion naira as the central bank has been trying to remove cash from the banking system to contain annual inflation, which hit a more than 11-year high in September.
Liquidity got a lift by the central bank’s budget allocations for government agencies on Monday and the repayment of matured treasury bills due on Thursday.
Traders said major players were willing to lend their cash at 10 percent for overnight lending, unchanged to Thursday.
“We expect the overnight rate to remain stable around the present level next week unless the central bank sustains its cash withdrawal exercise,” one trader said.
($1 = 304.5000 naira) (Reporting by Oludare Mayowa; Editing by Tom Heneghan)
Connect via email