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BANKING & FINANCECOVERNEWSLETTER

Overnight Lending Rate Crashes to 11%

Nigeria’s overnight interbank rate dipped on Friday, October 21, just after the Central Bank of Nigeria, CBN, repaid matured treasury bills and cash meant for government’s capital projects hit the system

Overnight lending rates crashed to 11 percent, below the apex bank’s benchmark 14 percent, from 15.5 percent the day before. Rates had risen above 100 percent at the start of the week because of a central bank dollar auction, traders said.

He said the bank repaid about 138.7 billion naira ($456 million) in matured treasury bills on Thursday to boost liquidity. They also said the market was flush with cash after the central bank sold fewer dollars than expected and returned excess naira.

The bank sold $313 million at a special auction meant to clear a backlog of dollar demand. Traders said an unspecified amount of naira was released on Friday to fund government spending on capital projects.

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