Nigerian interbank rates up on NNPC, NDIC withdrawals
Friday March 16, 2012
LAGOS, March 16 (Reuters) - Nigeria's interbank lending rates rose sharply this week to an average of 15.08 percent, from 14.25 percent last week, as state-owned energy firm NNPC and deposit insurer NDIC made large withdrawals, putting commercial banks in deficit with the central bank.
"The market closed on a negative balance as a result of the large cash outflows from the system this week with cost of borrowing closed higher at the interbank," one dealer said.
Traders said the market opened with a negative balance of 129.55 billion naira ($820.72 million) on Friday, compared with a positive balance of about 65 billion naira last Friday.
The secured Open Buy Back (OBB) rose to 14.50 percent, from 13.75 percent last week, 250 basis points above the central bank's 12 percent benchmark rate, and 450 percentage points above the Standing Deposit Facility (SDF) rate.
Overnight placement jumped to 15.25 percent, compared with 14.24 percent, while call money traded at 15.50 percent, against 14.75 percent last week.
"We expect rates to keep inching up next week until another round of budget disbursal possibly before next week Friday," another trader said.
Dealers said they expected the market to remain illiquid for the early part of next week, because of expected further cash outflows into foreign exchange purchases, and investment in treasury bills and bonds.