Nigeria’s interbank lending rate rose to around 15 percent on Friday from 5 percent last week after commercial lenders paid for dollar and treasury bill purchases, draining liquidity, traders said.
The central bank sold dollars twice this week, thereby tightening naira liquidity, traders said. It also sold 25.67 billion naira in treasury bills on Wednesday, which further pushed up borrowing costs.
“The interbank rate traded above the 40 percent level on Wednesday,” the trader said, because of the treasury bill auction. He said rates later dropped sharply after the central bank repaid matured bills worth 65 billion naira.
Borrowing costs are expected to rise next week, since the central bank may keep up its forex interventions to stabilise the local currency, traders said.
