Nigeria interbank rate rises on large T.bill sales
LAGOS Dec 7 (Reuters) - Nigerian interbank rates inched up to an average 11.91 percent this week from 11.33 percent last week after the central bank sold large amounts of treasury bills to some lenders in a move to reduce liquidity in the system, traders said.
The central bank sold about 63 billion naira ($400 million) in Open Market Operations (OMO) to help dampen inflation by soaking up cash, traders said.
The central bank had sold about 127.17 billion naira in treasury bills at the primary market on Wednesday, which left the market cash balance at about 190 billion naira on Friday compared with market open cash balance of 242 billion naira last Friday.
The secured Open Buy Back (OBB) rose to 11.75 percent this week from 11 percent last week, 25 basis points below the central bank's 12 percent benchmark rate and 1.75 percentage points above the Standing Deposit Facility (SDF) rate.
Overnight placement and call money both closed at 12 percent apiece compared with 11.5 percent, respectively last week.
Dealers said a possible budget flows next week could depress rates marginally, but expected central bank to take out excess funds from the market to keep the rates within its benchmark interest rate.
"We see cost of borrowing easing marginally next week on likely inflows of budget cash and some treasury bills maturities repayment, helping to increase liquidity in the market," one dealer said. ($1 = 157.27 naira) (Reporting by Oludare Mayowa; Editing by Chijioke Ohuocha, Ron Askew)