Nigeria interbank rates ease on matured debt cash supply

LAGOS Fri Jan 17, 2014 9:51am EST

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LAGOS Jan 17 (Reuters) - Nigerian interbank lending rates eased to an average of 10.3 percent on Friday, compared with 10.5 percent the previous week, pressured by a surge in cash supply from matured debt notes.

The central bank repaid about 419 billion naira ($2.62 billion) in special open market operation (OMO) debt notes on Friday and 158 billion naira in treasury bills the previous day, traders said.

"We are still expecting the posting of additional funds from December budget allocations to states and local government by Monday and this will keep the system liquid for the better part of the month," one dealer said.

Nigeria distributed about 581.5 billion naira among its three tiers of government on Thursday with around half of the funds going to states and local governments.

The secured open buy back (OBB) closed at 10.15 percent, compared with 10.25 percent last week, 1.85 percentage points lower than the central bank's benchmark rate.

Overnight placement dropped to 10.25 percent from 10.50 percent, while call money closed at 10.50 percent against 10.75 percent last week. ($1 = 159.9 naira)

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