The overnight tenor of the Nigerian Interbank Offered Rate, NIBOR, slumped to 14 per cent on Friday, November 18, from 22 per cent the preceding week .
According to traders, the drop came after the Central Bank of Nigeria, CBN, repaid matured treasury bills, injecting cash into the banking system.
Traders said the bank injected around N140 billion through its pay-out of matured open market operations bills, which helps lower borrowing costs among banks.
The cash helped money-market liquidity, trader despite bond and treasury bill during the week. The debt office raised N39 billion with local currency bonds and N120 billion in short-dated treasury bills last week.
The overnight lending rate had risen earlier last week to peak at 30 percent last Wednesday due to tight liquidity, Reuters revealed.
It crashed on Thursday following cash injections from matured treasury bills. Traders expect borrowing costs to rise slightly next week as liquidity drains away.
