Afran : Nigerian interbank rates rise on strong credit demand
on 2009/9/26 12:31:31
Afran

LAGOS, Sept 25 (Reuters) - Nigerian interbank lending rates rose to 11.33 percent on average this week from 9.16 percent last week as demand for credit outweighed available naira cash in the system, traders said on Friday.

The secured Open Buy Back (OBB) closed higher at 8 percent from 7 percent last week and 200 basis points above the central bank's 6.0 percent benchmark rate.

Overnight closed at 11 percent against 9.5 percent, while call rose to 12 percent from 11 percent previously.

About 147 billion naira came into the system from the distribution of crude oil savings to federal agencies and repayments of matured treasury bills, but it was not enough to meet the strong credit demand, dealers said.

"The system was short by about 44 billion naira in spite of the inflows of 87 billion naira from the excess crude account and repayment of 60 billion naira in matured treasury bills," one dealer said.

Traders said funding for foreign exchange purchases remained the only major source of cash outflow from the banking system in the week.

But they expect an increase in borrowing costs between banks next week when forex and treasury bill auctions further drain liquidity from the system.

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