LAGOS, April 13 Nigerian interbank lending rates
rose sharply by around 100 percentage points on Thursday, as
commercial lenders scrambled for cash to pay for bond purchases
and cover their positions, traders said.
Overnight lending rates rose to around 300 percent from 200
percent at the end of Wednesday, as naira liquidity dried up in
the banking system and some banks were forced to borrow from the
Nigeria raised 105.32 billion naira ($345 million) from bond
sales this week, and payment for the debt sale was due on
Thursday, draining liquidity in the market and pushing further
up the cost of money in the market.
"The market is currently short of funds with major placers
asking for a higher rate on their money as a result of pressure
from those who need cash to cover their positions," one trader
The central bank has consistently sold dollars at both the
spot and forward markets, and required banks to pay for the
purchase. This has drained liquidity in the market.
Nigeria's financial markets will be closed until April 18
for a public holiday.
($1 = 305.1000 naira)
(Reporting by Oludare Mayowa; Editing by Toby Chopra)