Interbank Rate Jumps after CBN N130b Liquidity mop-up

By Dipo Olowookere

Overnight interbank lending rate in Nigeria increased sharply on Tuesday after the Central Bank of Nigeria (CBN) sold treasury bills through the Open Market Operations (OMO) to soak up liquidity from the banking system in a bid to curb pressure on the Naira.

Business Post reports that the overnight rate jumped to 18.67 percent yesterday from 13.25 percent the previous day.

Also, the Open Buy Back (OBB) rate broadly rose to 17.50 percent on Tuesday from 12.33 percent on Tuesday.

The apex bank had resumed the sale of treasury bills via OMO this week, and yesterday, the chief lender mopped up excess liquidity in circulation with the sale of N129.72 billion worth of T-bills.

N22.38 billion worth of the 72-day bill was sold by the central bank on Tuesday at 13.10 percent stop rate, while N107.34 billion worth of the 247-day bill was sold at 14.90 percent stop rate.

The apex bank is expected to continue its OMO auction today, though rates are expected to marginally rise.