Nigeria's interbank overnight lending rate was 15 percent on Monday but liquidity was low as banks had transferred government revenues to a central bank account, traders said.
Trading on the interbank market has seen disruptions for a week as authorities have ordered lenders to move government funds to a "Treasury Single Account" (TSA) at the central bank, part of an anti-corruption campaign.
"Market liquidity has dropped to 56 billion naira by Monday from around (a) 161 billion naira credit balance on Friday," one dealer said.
Dealers said there had been no trading in the morning because commercial lenders were unwilling to make bids for rates quoted first at between 20-50 percent for overnight lending.
"The market liquidity has shrunken because of the implementation of the TSA (Treasury Single Account), but the central bank injected some liquidity into the system from refunds on cash reserves to some banks on Thursday and Friday, which helped ease pressure in the market," one dealer said.
Analysts said about 1.2 trillion naira or 10 percent of banks' total deposits have left the banking system to comply with the TSA order.
Banks are hoping for a cut in the cash reserve requirement rate at the central bank's rate meeting on Tuesday to boost liquidity, a senior treasurer at a major bank told Reuters.
Nigeria's central bank currently requires banks to keep 31 percent of both public and private sector deposits in a reserve account with the central bank.