Nigeria's interbank lending rate was flat yesterday at 0.5 percent after additional cash inflows from public sector wages hit the banking system and raised level of liquidity, traders said.
The secured open buy-back (OBB) - the rate at which lenders can borrow from the interbank market using treasury bills as collateral - held steady at 0.5 percent same level last week, far below the central bank's 13 percent benchmark interest rate.
Traders said remittance for public sector's wages of about 150 billion naira was injected into the system on Friday, while refund on cash reserves requirements (CRR) and foreign exchange intervention were also credited to the accounts of some banks, further boosting liquidity.
Banks' credit balance with the central bank opened at 514 billion naira on Friday, from a surplus of about 385 billion naira last week, but traders said with the fresh inflow on Friday, the banking system liquidity should exceed 800 billion naira.
"Since the central bank has not been mopping up excess liquidity in the market for over three months now, cost of borrowing among banks will the continue to trade at the present level," one dealer told Reuters.
Traders said some commercial lenders transacted overnight placement at 1 percent on Friday, same level last week.
"We expect the system to remain liquid next week and interbank rate trading at the prevailing level," another trader said.