Inter-bank lending rates eased marginally last week to an average of 14.33 per cent, from 14.41 per cent the previous week due to the impact of funds distributed to government agencies from its stash of oil money and treasury bills maturing.

 The Federal Government shares proceeds from oil sales from a centrally held account every month to its three tiers of government — federal, states and local — providing liquidity to the banking system and impacting on lending rates.

Reuters quoted a dealer as saying, “There were large inflows from disbursement of a portion of the excess crude accounts to some state and local governments this week, including payment of about N98bn ($622.06m) in treasury bills maturity which hit the system on Monday.”

Dealers said the market opened with a cash balance of about N75bn on Friday, compared with a negative balance of N42.60bn last Friday.

Another dealer was quoted as saying, “We expect market liquidity to gradually thin out next week (this week) and rates to inch up a little because of outflows into foreign exchange purchases and other transactions.”

The secured Open Buy Back rate fell to 14 per cent last week, from 14.25 per cent the previous week, representing 200 basis points above the Central Bank of Nigeria 12 per cent benchmark rate, and four percentage points above the Standing Deposit Facility rate.

Source: Punch