The interbank lending rates which is the rate at which banks lend amongst themselves surged to an all time high of 128 per cent from 70 per cent last week Friday.
Overnight interbank rate soared to a record high of 128 per cent on Monday, October 17 on naira cash shortages having opened the day at 100 per cent, traders said.
This leap came after banks funded their accounts to participate in a currency forward, even as the value of the naira firmed up against the dollar at the parallel market.
Traders said the CBN held a dollar forward auction last week Friday to clear a backlog of demand from airlines, manufacturers and other companies, as the country’s currency crisis deepened.
Meanwhile, the money market had ended on Friday with no deals as commercial lenders held onto naira to be able to participate in the auction and overnight rate had closed Friday around 70 per cent from 14 per cent which it was on Thursday.
