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LequteMan
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Nigeria's overnight interbank lending rate on Thursday rose sharply to five percent, hitting its highest level in three months.
This is happening after the central bank drained naira liquidity through sales of (OMO) treasury bills, traders said. Traders said CBN sold about 161 billion naira ($810 million) in open market operations bills on Wednesday, draining cash from the banking system.
As a result, the market closed at 3.5 percent for overnight borrowing among commercial lenders on Wednesday. The interbank rate had closed consistently at 1 percent in the last three months due to improved liquidity in the banking system.
There was no official comment on the sudden rate rise, but higher rates could support the naira.
The government, fighting intense pressure on the currency from the collapse in prices for Nigeria's oil exports, has pegged the currency at around 198 per dollar on the official interbank market.
The currency hovers around 290 per dollar at the unofficial market.
Reuters
This is happening after the central bank drained naira liquidity through sales of (OMO) treasury bills, traders said. Traders said CBN sold about 161 billion naira ($810 million) in open market operations bills on Wednesday, draining cash from the banking system.
As a result, the market closed at 3.5 percent for overnight borrowing among commercial lenders on Wednesday. The interbank rate had closed consistently at 1 percent in the last three months due to improved liquidity in the banking system.
There was no official comment on the sudden rate rise, but higher rates could support the naira.
The government, fighting intense pressure on the currency from the collapse in prices for Nigeria's oil exports, has pegged the currency at around 198 per dollar on the official interbank market.
The currency hovers around 290 per dollar at the unofficial market.
Reuters
