Interbank Rates Dips by 0.5% As Banks Accumulate Cash

Nigeria’s interbank rate eased on Friday, February 5, to an average of 0.5 percent for overnight lending, down from to 1.25 last week, with excess liquidity, Reuters reports.

The Central bank had injected about 240 billion naira in matured open market operation (OMO) treasury bills and refunds on cash reserves to some banks on Thursday, boosting liquidity and forcing down the cost of borrowing among banks.

Commercial lenders on as at Wednesday , had a combined credit balance with the central bank of 312 billion naira, and liquidity was expected to rise further with the funds from the retired bill and refunds from the surplus cash deposited for foreign exchange purchases.

The secured Open Buy Back (OBB) also fell to 0.50 percent from 1 percent last week.

Nigeria’s interbank rate mirrors the level of naira cash liquidity in the banking system.