Overnight Lending Rate Drops after Cash Injection

Nigeria's overnight lending rate dropped to around 12 percent on Friday from 16 percent a week earlier as maturing bills and government budget disbursements pumped more cash into the money markets.

Traders said the market opened on Friday with a cash balance of 9 billion naira, against a deficit of about 2.3 billion naira last week. The central bank repaid about 70 billion naira in matured bills on Thursday to boost liquidity.

Borrowing costs in Africa's biggest economy reflect liquidity in the money market, which tends to lead to lower or higher rates depending on the number of borrowers.

The central bank sold around $200 million at a currency intervention this week to clear a backlog of dollar demand on the official interbank market.