Home Finance Nigerian inter-bank rates up on budget cash delay

Nigerian inter-bank rates up on budget cash delay

by Business News Report

Nigeria’s inter-bank lending rates were up on Friday to an average of 15.50 per cent, compared with 14.25 per cent last week, as a delay in releasing the December budgetary allocation to government agencies starved the system of funds. Traders said the market opened on Friday with a cash balance of one billion naira, an indication that the system was illiquid.
Africa’s top crude exporter distributes oil funds from centrally held accounts every month to its three tiers of government — federal, states and local — which provides much needed cash inflow to the banking system. No official was willing to comment on reason for the delay in releasing funds from the December allocation. The secured Open Buy Back (OBB) climbed to 15 per cent from 14 percent last week, 300 basis points above the central bank’s 12 percent benchmark rate, and 5.0 percentage points above the Standing Deposit Facility (SDF) rate. Overnight placement jumped to 15.50 per cent, from 14.25 per cent, while call money rose to 16 percent, against 14.50 per cent previously

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