This is certainly not a very good period for Nigerian banks. According to Thisday inter bank rates have increased to 44%. See below;
There were strong indications Tuesday that the severe liquidity squeeze experienced in the banking sector last month, when a 50 per cent Cash Reserve Requirement (CRR) for public sector deposits was imposed by the Central Bank of Nigeria (CBN), was biting hard.
This was apparent in the astronomical rise in the cost of lending among commercial banks yesterday as the Nigerian Interbank Offered Rates (NIBOR), which has inched upwards since September, climbed further to an average of 44 per cent from 28 per cent on Monday.
Data made available by the Financial Market Dealers Association (FMDA) showed that while the Call (Overnight) tenor increased to 44.67 per cent yesterday, from 25.83 per cent on Monday, the 7-day tenor also jumped to 43.12 per cent yesterday, from 24.12 the previous day.A research note from the Renaissance Capital Limited (RenCap) pointed out that the development in the market could be as a result of the delayed impact of the increase in the CRR for public sector deposits.
The impact of this on lending to small businesses will be severe in the long run.
