Nigeria overnight lending rate drops after cash injection

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Nigeria’s overnight lending rate dropped to around 12 percent on Friday from 16 percent a week earlier as maturing bills and government budget disbursements pumped more cash into the money markets.

Traders said the market opened on Friday with a cash balance of 9 billion naira, against a deficit of about 2.3 billion naira last week. The central bank repaid about 70 billion naira in matured bills on Thursday to boost liquidity.

Borrowing costs in Africa’s biggest economy reflect liquidity in the money market, which tends to lead to lower or higher rates depending on the number of borrowers.

The central bank sold around $200 million at a currency intervention this week to clear a backlog of dollar demand on the official interbank market.

 

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Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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