CBN sold 31.94 billion naira ($104.76 million) in treasury bills on Friday in a bid to tighten liquidity in the money market while overnight lending rate fell.

Traders said the bank sold 31.52 billion naira of 349-day treasury bill at 18.59 percent and 440 million naira of 160-day treasury bill at 17.98 percent at an auction on Friday.

Cost of borrowing among commercial lenders however dropped to around five percent on the interbank market from around 8.5 percent last week.

Traders said cash balance in commercial lenders’ accounts with the central bank stood at 320.35 billion naira on Friday, boosted by the repayment of around 287.39 billion naira in matured treasury bills on Thursday.

“Interbank rate is at low level because the central bank sold fewer dollars this week (on the currency market),” one currency trader said.

Traders expect rates to remain flat next week unless the central bank decides to take advantage of the low rates to mop-up excess liquidity from the banking system.