LAGOS, June 7 Nigerian interbank lending rates
eased to an average of 10.25 percent on Friday, compared with
The 12.31 percent average that they opened at, as the repayment
of matured treasury bills by the central bank boosted liquidity.
Traders said about 206 billion naira ($1.30 billion) in
matured treasury bills was repaid on Thursday, raising the
volume of cash in the market and pushing down cost of borrowing
"The central bank made attempt to mop-up the excess cash
with the issuance of open market operations (OMO) debt note on
Friday, with little success," one dealer said.
The opened with a cash balance of about 206 billion naira on
Friday, traders said.
The secured Open Buy back (OBB), fell to 10.25 percent
compared with 12.25 percent on Monday and 1.8 percentage points
lower than the 12 percent central bank's benchmark interest
Both overnight placement and call money also fell to 10.25
percent apiece, down from 12.25 percent and 12.5 percent at the
start of the week, respectively.
Traders said cost of borrowing should inch up gradually next
week as the central bank issues more OMO bills to reduce cash in
the system in its bid to curb inflationary growth.
"We expect to see more OMO issuance next week and with the
coming bond auction on Wednesday, the volume of cash will reduce
and rate will definitely rise," another dealer said.
Nigeria plans to sell 85 billion naira ($535 million) in
bonds ranging between five and 20 years at its sixth monthly
debt auction of the year on June 12. [ID: nL5N0EJ1C0]
($1 = 158.9 naira)
(Reporting by Oludare Mayowa; Editing by Tim Cocks)