CBN Battles Excess Cash With 32 Billion Naira Treasury Bills
The Central Bank of Nigeria, CBN on Friday sold 31.94 billion Naira in treasury bills in a bid to reduce the amount of cash in the money market.
This is even as cost at which banks lend to each other fell on Friday to around 5% on the interbank market from around 8.5% last week.
Traders said the apex bank sold 31.52 billion naira of 349-day treasury bill at 18.59% and 440 million naira of 160-day treasury bill at 17.98% at an auction on Friday.
Traders also said that cash balance in commercial banks' accounts with the Central Bank stood at 320.35 billion naira on Friday, boosted by the repayment of around 287.39 billion naira in matured treasury bills on Thursday.
"Interbank rate is at low level because the Central Bank sold fewer dollars this week (on the currency market)," one currency trader said.
Traders expect rates to remain flat next week unless the Central Bank decides to take advantage of the low rates to mop-up excess liquidity from the banking system.