The market opened with a cash balance of about 237 billion naira on Friday

Interbank lending rates eased by 200 basis points on Friday to an average of 11 percent, from 14 percent last week after repayment of large funds in matured treasury bills helped boost the amount of nairas in the system.

Dealers said about 116 billion nairain maturing bills from an open market operation (OMO) hit the market on Thursday, helping to lift liquidity and pushing down the cost of borrowing among banks.

Dealers said the market opened with a cash balance of about 237 billion naira on Friday, compared with 197 billion naira deficit last week.

The secured Open Buy Back (OBB) fell to 10.50 percent, from 14 percent last week, 1.50 percentage points lower than the central bank’s 12 percent benchmark rate, and 50 basis points above the standing deposit facility (SDF) rate.

Overnight closed at 11 percent compared with 14 percent last week, while call rates dropped to 11.50 percent against the 14 percent previously.

“We are anticipating a situation where the central bank would intensify its effort to mop-up idle funds from the system next week and this should see rates inching up to around 14 percent for overnight,” one dealer said.

Nigeria sold 50.65 billion naira in 3- and 6-month bills this week, 20 billion less than planned at its regular auction with yield also lower than at the previous auction, while it sold $120 million at the only foreign exchange auction this week.

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