Interbank lending rates eased to 9.25 percent on average on Thursday, better than the 10 percent where it closed last Friday after the Central Bank of Nigeria (CBN) repaid matured treasury bills to investors, traders said.
Traders said the CBN injected about 124 billion naira ($623.27 million) in matured open market operation notes into the banking system on Thursday, boosting liquidity in the market and helping to push down borrowing costs among banks.
Overnight placement had hit 15 percent on Wednesday after the state-owned energy firm NNPC recalled a portion of its deposits from banks to its central bank account.
“The NNPC recalled over 100 billion naira from the system this week, with some banks scrambling for funds to cover their position,” one dealer said. “The pressure has reduced today with the inflow of matured treasury bills funds into the system.”
Lenders’ balance with the central bank reduced to 118 billion naira in credit on Thursday compared with 201 billion naira a week ago, traders said.
The secured open buy back rate fell to 9 percent from 10 percent last week, 4 percentage points lower than the central bank’s lending rate of 13 percent.
Overnight placement declined to 9.5 percent from 10.5 percent last week.
Traders said rates should ease further next week as a portion of budgetary allocations for the month of June is expect to hit the system.
Nigerian markets will be closed on Friday, July 17, and Monday, July 20, for public holidays.