Nigeria’s overnight interbank lending rate rose sharply to 29.5 percent on Friday, up from 19 percent last week, after the Central Bank of Nigeria, CBN, sold treasury bills to soak up liquidity from the banking system in a bid to curb pressure on the naira.
Traders said the central bank sold about N17 billion ($55.81 million) worth of open market operations (OMO) paper on Friday and also soaked up about N110 billion in bonds settlement.
“The interbank rate ranged between 20-50 percent intraday because of the huge amount of liquidity soaked out of the market by the central bank today, but the rate eventually closed at around 29.5 percent for the overnight,” one trader said.
Nigeria has stepped up the frequency of treasury bill sales recently to soak up excess liquidity in a move to curb pressure on the local currency, leaving the market dry and…
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