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Nigerian interbank
lending rates eased to 3.5 percent on average last week from 4.0
percent the previous week due to an increase in liquidity, traders said.

Dealers said the
disbursement of large budgetary allocations to the three tiers of
government — federal, state and local government — had raised
liquidity levels and pushed the cost of borrowing among banks down.

“What would have
happened is that rates would have dropped significantly to around 1.0
percent due to the huge cash inflows from budget disbursement but for
the increase in the benchmark interest rate on Tuesday by the central
bank,” one dealer said.