Nigeria’s interbank lending rate rises to 16 per cent

Central bank of Nigeria (CBN)
Central bank of Nigeria building

Nigeria’s overnight interbank lending rate, Friday, climbed to 16 per cent from about 13 per cent at the end of last week.

This is coming after the Central Bank of Nigeria, CBN, debited commercial banks’ accounts for dollar purchases and also issued
treasury bills to mop up liquidity.

Reuters reports that the Central Bank sold dollars twice this week to
clear a backlog of demand for companies and private individuals to
ease pressure on the naira.

Traders said the regular forex auctions and the treasury bill sales drained liquidity.

The money market opened with a cash deficit of about N2.3 billion‎ on Friday, compared with a deficit of N45.64 billion last week.

The Central Bank on Friday offered to sell about N40 billion in treasury bills to further tighten liquidity.

“The tight liquidity is designed to curb demand for dollar,” a market operator said.

There are speculations that the money market rates may continue to rise next week as the Central Bank increases the frequency of its
dollar sale.

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Oladeinde Olawoyin reports Business & Economy, Development and Lagos Metro at PREMIUM TIMES. A First Class graduate of Mass Communication from the University of Ilorin, Ilorin, he was nominated in the journalism category of The Future Awards Africa in 2017. Aside maintaining a column titled ‘SATURDAY SATIRE’, he also writes art and culture pieces on weekends. Twitter: @Ola_deinde

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