Nigeria’s interbank overnight lending rate spiked to 80% today following a drop in liquidity
The NNPC withdrew more cash from the banking system today in line with the CBN monetary policy instructions
Most banks were hit hard and had no choice but to borrow from other banks attracting punitive interest rates.
Today increase is an additional 20% from the 60% closed last week
The cost of borrowing among banks has oscillated between a high of 70 percent and a low of 14 percent since last month, when the central bank hiked the cash reserve requirement (CRR)on private sector deposits with commercial lenders to 20 percent from 15 percent.
The Interbank rate is the rate at which banks lend to each over night. The 80% is per annum so you will have to divide that by 365 to get how much interest rate the banks will pay per day.
