This represents the second consecutive week of sharp increase in CBN’s lending to banks. The previous week, CBN lending to banks rose by 97.9 per cent. This implies that some banks are relying more on CBN loans to meet their cash obligations. It also implies banks with surplus cash are unwilling to lend to banks with deficit. However, the amount of cash deposited with CBN by banks with surplus cash dropped slightly by 3.47 per cent to N594.7 billion from N613 billion the previous week.
Meanwhile, cost of funds dropped slightly in the interbank money market following outflow of N314 billion worth of fresh treasury bills sold by the CBN as well as inflow of same amount from repayment of matured treasury bills by the apex bank. As a result, the Nigeria Interbank Offered Rate (NIBOR) for overnight lending fell to 2.15 per cent from 4.33 per cent, while the rate for One month lending fell to 8.06 per cent from 9.04 per cent. However, interest rate for Three months and Six months lending rose to 12.34 per cent and 11.87 per cent from 11.87 per cent and 13.89 per cent.