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LAGOS, Feb 3 (Reuters) - Nigeria's central bank sold about 400 billion naira ($1.27 billion) of Treasury bills on Friday, lifting the interbank lending rate up to 12 percent, traders said.
The bank sold 82 billion naira in 181-day Treasury bills at 18 percent and 309 billion at 18.6 percent, mopping up liquidity from the money market and pushing up the cost of borrowing among commercial lenders.
"We have some major placers quoting about 20 percent for overnight placement, but most takers are not willing to borrow at that rate," one dealer said, adding that the rate eventually settled around between 10 percent and 12 percent at 1328 GMT.
Markets had opened on Thursday with a surplus liquidity of about 467 billion naira due to an injection of matured Treasury bills until the central bank later debited banks for the purchases of 302.4 billion in primary market Treasury bills.
Traders said the central bank on Friday further moved to reduce liquidity with the sale of open market operations bills, which fetched returns above the inflation rate.
Nigeria raised 302.4 billion naira at Wednesday's Treasury bills auction, more than the 242 billion planned due to strong demand for the one-year debt, while payment for the purchased was debited from commercial lenders' accounts on Friday.
Local currency traded flat at both official interbank window and parallel market, with black market traders quoting the naira flat at 498 to the dollar. Commercial lenders quoted the currency at 305.25 a dollar, about the level it has traded since August.
Nigeria's main all-share index . fell by 0.52 percent to close at 25.802 points on Friday, dragged down by losses in Nestle (2.86 percent) and Guaranty Trust Bank (2.46 percent).
$1 = 314.50 naira Reporting by Oludare Mayowa, editing by Ed Osmond