Interbank lending rates climbed to an average of 12 percent on Friday, from 10.37 percent last week, following withdrawal of cash from banking system by the Nigerian National Petroleum Corporation (NNPC) during the week.
The state-owned energy firm withdrew portion of its deposits with some lenders to its account with the Central Bank of Nigeria (CBN), after it sold about $400 million to some banks this week, draining liquidity from the system and raising on the cost of borrowing among banks.
NNPC, which accounts for the bulk of dollars traded on the interbank market, sold the greenback to some lenders this week, and withdrew the proceeds to its account with the central bank.
Traders said the liquidity level was down after the NNPC withdrawal, pushing up rates.
Traders said rates are seen climbing further next week because of expected further withdrawals by the NNPC, foreign exchange purchases and treasury bill auction.
The open buy-back (OBB) climbed to 11.75 percent from 10.25 percent last week, 25 basis points below the central bank’s benchmark interest rate of 12 percent
Overnight placements also climbed to 12.25 percent compared with 10.5 percent last week.
Nigeria, which raised 100 billion naira ($617.28 million) in bonds this week, plans to raise another 70.46 billion naira worth in treasury bills of 3-month and 6-month maturities at an auction next Wednesday.
