The interbank overnight lending rate fell to a five-year low on Thursday, hit by excess liquidity in the market that spurred renewed bond buying from commercial lenders and pension funds, traders said.
Reuters reported that the overnight lending rate halved to one per cent from the previous day. It had hovered around a three-month low of three per cent last week after the Central Bank of Nigeria repaid matured open market bills and did not issue fresh ones to mop up the funds, in a bid to keep borrowing costs low.
Yields on 10-year government bonds fell 71 basis points on Thursday to 13.59 per cent as the excess liquidity filtered into the bond market.
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