By Agency Reporter

Monday, 6 Dec 2010

Nigerian interbank interest rates climbed to 9.91 per cent on average this week from 5.83 per cent last week on a liquidity crunch triggered by a big cash withdrawal by the Nigerian National Petroleum Corporation, traders said on Friday.

The secured Open Buy Back rose to 8.25 per cent from five per cent, 200 basis points above the Central Bank of Nigeria‘s 6.25 per cent benchmark rate and four percentage points higher than the Standing Deposit Facility rate, Reuters said on Friday.

Overnight funds closed at 10.5 per cent from six per cent, while call money traded at 11 per cent from 6.5 per cent.

”We expect interbank rates to climb further because there are going to be more cash outflows from the system next week,” one trader said.

More funds are expected to go into foreign exchange and treasury bills purchases next week, while the Nigerian National Petroleum Corporation may recall more funds from its accounts with retail banks to its Central Bank of Nigeria account.

 

Source: Punch