Nigeria’s interbank lending rates eased 100 basis points to an average of 14.33 percent this week, aided by improved liquidity.

Dealers said the market opened with a cash balance of about 14.6 billion naira ($90 million) on Friday, compared with a negative balance of 12.74 billion naira last Friday.

“We have inflows from repaid matured treasury bills of a net balance of about 50 billion naira and around 30 billion naira disbursal to some government agencies in the week, helping to lift market liquidity,” one dealer said.

Nigeria sold 95.56 billion naira in three-month and six-month treasury bills on Wednesday, while there was net cash inflow from matured bills.

Dealers said some lenders also preferred to take money from the central bank window, helping to ease pressure on the borrowing costs this week.

The secured Open Buy Back (OBB) rate eased to 13.50 percent from 14.75 percent last week, 1.5 percentage points above the central bank’s 12 percent benchmark rate, and 350 basis points above the Standing Deposit Facility (SDF) rate.

“Interbank rates are expected to inch up next week by the time we start funding for foreign exchange and treasury bills purchases and NNPC (state-owned energy company) recall a portion of its deposit with some banks,” another dealer said.

NNPC supplies the bulk of foreign exchange traded on the interbank forex market and usually recalls part of the naira proceed to its account with the central bank to fund its obligations to the government.

($1 = 162.20 naira)

Source: Reuters (Reporting by Oludare Mayowa; Editing by Joe Brock, John Stonestreet)