October 8, 2015/Reuters

Nigeria’s interbank overnight lending rate fell to a five-year low on Thursday, hit by excess liquidity in the market that spurred renewed bond buying from commercial lenders and pension funds, traders said.

The overnight lending rate halved to 1 percent from the previous day. It had hovered around a three-month low of 3 percent last week after the central bank repaid matured open market bills and did not issue fresh ones to mop up the funds, in a bid to keep borrowing costs low.

Yields on 10-year government bonds fell 71 basis points on Thursday to 13.59 percent as the excess liquidity filtered into the bond market.