Interbank Lending Rates Hits 200% As Banks Borrow From Each Other To Buy Forex
Nairametrics| Nigerian Banks are on a buying spree and they are borrowing at record rates to do so. According to a Reuters article, Nigeria’s interbank overnight lending rates, the rates at which banks lend to each other, spiked to a record high of 200 percent on Thursday. The reason for the spike was no other than Forex.
Banks were reported to have made dollar purchases as the central bank sold forex in fulfillment of its promise to sustain supply. Banks are expected to sell on to customers at a juicy margin of about 20%. Purchases will only be for those looking to travel out of Nigeria either for personal, business or medical travel. Forex will also be purchased by those looking to pay school fees abroad for their wards.
The overnight lending rates eventually dropped to about 133% as the market closed on Thursday.