Finance
Interbank rate rises as banks settle debt purchases
Nigeria’s interbank lending rate rose to 12 per cent on Friday from eight percent after bond and treasury bill purchases paid for by lenders drained banking system liquidity, traders said.
The central bank sold N25 billion worth of 363-day treasury bills on Friday, while banks paid for bonds bought at an auction on Wednesday. Money market rates stood at 15 per cent last week. They dropped to 8 per cent after the central bank injected N89.96 billion to settle matured treasury bills on Thursday.
“We see interbank rate climbing to 20 percent at the start of next week because of expected central bank intervention in the foreign exchange market,” one trader said.
The central bank has been using treasuries to mop-up liquidity from the banking system in a bid to also curb pressure on the currency. Market liquidity opened at N28.69 billion deficit on Thursday, traders said, narrowing the deficit which widened to N78.29 billion on Monday.
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