Overnight lending rates rose to an average of 12.5 percent on Friday, compared with 9 percent last week, after the CBN drained cash from the money market.
The central bank debited commercial lenders N58.2 billion ($293 million) to enforce its Cash Reserve Requirement (CRR) and another N306 billion ($1.5 bln) to fund Treasury bill purchases, curbing liquidity.
The central bank debits lenders twice in a month to enforce its CRR rule, which requires banks set aside cash with the regulator against its public and private deposits.
“Rates shot up… to an average of 15 percent when the CRR was debited, but later eased as cash for government workers hit the market,” one dealer said.
The secured Open Buy Back (OBB) rose to 12 percent from 9 percent last week. The secured fund was one percentage points below the 13 percent central bank’s benchmark interest rate.
Overnight placement also rose to 13 percent against 9 percent last week.
