- Advertisement -spot_img
28.2 C
HomeTop NewsNigerian interbank rates ease on excess liquidity

Nigerian interbank rates ease on excess liquidity

- Advertisement -spot_img
Kakawa Ceo, Jaiyeola

Nigerian interbank lending rates eased this week to an average of 10.5 percent, compared to last week’s 10.75 percent, on the back of increased liquidity from retired treasury bills and refunds on excess payments of cash reserve requirements (CRR).
   Traders said about 200 billion naira ($1.22 billion) in matured treasury bills was retired on Thursday, while about 75 billion debited in excess of CRR was refunded to some banks, boosting liquidity levels in the banking system.
   “The market is very liquid, but irrespective of the central bank intention to pursue lower interest rates, we don’t expect rates to fall below the 10 percent level until the Monetary Policy Rate (MPR) is adjusted downward,” a dealer said.
Nigeria’s benchmark interest is currently at 12 percent with a corridor of 200 basis point plus/minus around it.
   New governor Godwin Emefiele said on Thursday he would pursue a gradual reduction in interest rates, an apparent reversal of his predecessor’s policy which was credited with bringing inflation down to single digits.
   The cash balance that lenders hold at the central bank rose to 535 billion naira surplus on Friday compared with 348 billion naira surplus last week Friday.
   The open buy-back (OBB) eased to 10.25 percent compared with 10.50 percent, 1.75 percentage points below the central bank’s benchmark rate of 12 percent.
   Overnight placement dropped to 10.50 percent from 10.75 percent last week, while call money fell to 10.75 percent from 11 percent previously.
   Traders said the cost of borrowing among banks should stay low next week due to prevailing excess liquidity in the system.

Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img