Nigeria’s overnight lending rate fell six percentage point to 14 percent on Thursday, after liquidity from a 150 billion naira ($836 mln) treasury bill maturity hit the banking system, dealers said.
Overnight lending rates have remained high since the central bank last month enforced a new cash reserve requirement for commercial lenders to curb liquidity. The bank has been squeezing cash from the system to try to support the naira.
The naira has been under pressure as falling oil prices have depressed Nigeria’s foreign reserves, and the central bank is struggling to keep the currency in a new target band of 160-176 it set last month when it devalued by 8 percent to protect its reserves.
The naira rose marginally in early trade on Thursday, a day after the central bank and four oil companies sold dollars to boost interbank market liquidity, dealers said.
Overnight lending rates stood at 20 percent on Wednesday. Rates spiked to a record high of 70 percent on Monday, after the central bank withdrew a total of 868 billion naira within two weeks to keep liquidity tight.
Reuters
