Nigeria’s interbank lending rates rose slightly this week to an average of 15.33 percent, from 15.16 percent last week, as naira liquidity fell, on large outflows to foreign exchange purchases, traders said on Friday.

Nigeria’s central bank had sold a total of $601 million at its bi-weekly foreign exchange auction this week, while some oil multinational companies also sold large dollar amounts to some banks, draining naira from the system.

Also reacting to the shortage, the naira closed up 0.75 percent against the dollar on the interbank market on Friday, dealers said.

Dealers said the market opened on Friday with a cash deficit of about 12.74 billion naira ($78.59 million), compared with a cash balance of about 21 billion naira last Friday.

The disbursal of budgetary allocations to government agencies last week had pushed down the cost of borrowing among banks, but large cash outflows to finance treasury bill purchases lowered liquidity in the market.

Dealers said the budget flow last week was short-lived because the market was short before the disbursal, while the inflow from matured treasury bills this week was not enough to support it.

The secured Open Buy Back (OBB) rose to 14.75 percent, compared with 14.50 percent last week, 2.75 percentage points above the central bank’s 12 percent benchmark rate, and 4.75 percentage points above the Standing Deposit Facility (SDF) rate.

Overnight placement closed flat at 15.50 percent, while call money rose to 15.75 percent, compared with 15.50 percent last week.

“The cost of funds will continue to rise next week because of expected outflows to treasury bills and foreign exchange purchases,” a dealer said.

Nigeria plans to auction 254.61 billion naira in treasury bills with maturities ranging from 3-months to one year on July 12. ($1 = 162.10 naira)

(Reporting by Oludare Mayowa; Editing by Tim Cocks)