Nigeria’s Overnight Lending Rate Eases to 12%

March 18, 2017
Interbank Lending Rate

Nigeria’s Overnight Lending Rate Eases to 12%

By Modupe Gbadeyanka

On Friday, March 17, 2017, Nigeria’s overnight lending rate eased to 12 percent compared with 15 percent at the start of the week, as commercial lenders anticipated fresh inflows from state bodies.

Some February budget allocations and payments ordered by President Muhammadu Buhari for federal states to pay delayed public salaries are expected to hit the banking system next week, helping to boost liquidity in the money market.

Traders said the market opened on Friday with a cash balance of N21.28 billion ($69.60 million) against a deficit of about N9 billion last week.

Nigeria issued more bonds and treasury bills at auctions this week than initially planned, draining some liquidity, though traders said there was still enough money in the system to support current lending rates.

The Naira firmed on the black market on Friday to N450 to the Dollar compared with 455 previously, and traded at N306.50k to the Dollar on the official interbank window, from N306.75k on Thursday.

The Naira was boosted by increased Dollar sales by the central bank to meet both corporate and individual hard currency needs via the official window, which has gained in importance since the central bank devalued the retail rate last month.

Reuters

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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