Nigeria’s overnight interbank lending rate, soared to 16 per cent from about 13 per cent at the end of last week.
This is coming after the Central Bank of Nigeria, CBN, debited commercial banks’ accounts for dollar purchases and also issued treasury bills to mop up liquidity.
Reuters reports that the Central Bank sold dollars twice this week to clear a backlog of demand for companies and private individuals to ease pressure on the naira.
Traders said the regular forex auctions and the treasury bill sales drained liquidity. The money market opened with a cash deficit of about N2.3 billion on Friday, compared with a deficit of N45.64 billion last week.
The Central Bank on Friday offered to sell about N40 billion in treasury bills to further tighten liquidity.
“The tight liquidity is designed to curb demand for dollar,” a market operator said.
There are speculations that the money market rates may continue to rise next week as the Central Bank increases the frequency of its dollar sale.