The Central Bank of Nigeria (CBN) effected the 75 % Cash Reserve Requirement (CRR) on public sector deposits in banks, this caused a significant increase in Nigerian Interbank Offered Rates (NIBOR) to an average of 14.68% on Wednesday. This development had been predicted by most financial market analysts.
It was gathered that the central bank withdrew about N750 billion from the banking system as a result of the monetary policy measure.
Consequently, data gathered from the FMDQ OTC showed that while the Call tenor jumped to 13.75 % yesterday, from 10.50 % the previous day, the 7-day tenor also climbed to 13.92 % yesterday, from 10.83 %.
Similarly, while the 30-day tenor closed higher at 14.33 % on Wednesday, from 11.37 % on Tuesday, the 60-day tenor, 90-day, 180-day and 365-day tenors all closed higher at 14.67 %, 15.08 %, 15.37% and 15.67% respectively.
The regulator therefore advised the dealers to fund the account (inclusive of one per cent commission) using the RTGS, by the close of business every Thursday for Monday auction session, saying that funding for Wednesday session should be done on Mondays.
The circular signed by N.T Igba on behalf of the Director, Trade and Exchange Department, CBN added that “Funds in respect of ineligible or cancelled bids and any balances shall be credited to the current account of the approved dealer by the end of the auction session. Please note that this prerequisite comes into effect as from the RDAS auction holding on Monday. 10th February, 2014”.