Nigeria Content Online

Nigerian interbank lending rates climbed to 10.25 percent on
average last week, from 9.66 percent the week before, on the back of large cash
outflows to foreign exchange and bond purchases, traders said last weekend.

The secured Open Buy Back held stable at 9.50 percent, 200 basis
points above the central bank’s 7.50 percent benchmark rate and 4.5 percentage
points higher than the Standing Deposit Facility rate.

But overnight placement climbed to 10.50 percent from 9.75
percent, while call money rose to 10.75 percent from 9.75 percent last week.

Dealers said outflows to foreign exchange and other transactions
in the week drained liquidity in the system and pushed up the cost of borrowing
among banks.

Nigeria sold over $600m at its central bank foreign exchange
auctions last week, while a total of N70bn was sold in 3-year and 5-year
sovereign bonds.

“There was inflow from personnel costs to government agencies in
the week, which helped reduced the impact of outflows on the cost of fund in
the market,” one trader said.

The market opened with a balance of about N86bn ($555m) on
Thursday but the market is expected to be short this week because of the impact
of major outflows to foreign exchange and other transactions.

“We see the market becoming short this week and the cost of
borrowing inching up a bit until the next round of budgetary disbursements,”
another dealer said.

The Nigerian market will be closed until Wednesday for the
Easter public holiday and governorship and state assembly elections on Tuesday.

The indicative rates for the Nigeria Interbank Offered Rate
closed higher in tandem with short-term funds, with the 7-day fund rising to
11.15 percent from 10.91 percent a week earlier.

The 30-day fund inched up to 12.33 percent from 12.12 percent,
the 60-day was up to 13 percent from 12.91 percent, while the 90-day dropped to
13.45 percent from 13.60 percent.

REUTERS