LAGOS (Reuters) – Nigeria’s overnight lending rate rose as high as 100 percent this week after the central bank withdrew naira liquidity to offset dollar purchases, but it fell sharply on Friday as the government disbursed budget funds through the banking system.
Overnight rates fell to 10 percent on Friday after the government passed 285 billion naira ($928 mln) for February allocations through the money market, reducing borrowing costs.
The central bank has been intervening on the official market to try to narrow the currency spread with the black market rate.
The black market rate was 520 to the dollar a month ago after the central bank devalued the exchange rate for retail customers to 375 naira to the dollar.
The bank sold $100 million in forwards on Thursday.
($1 = 307 naira)
(Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha; Editing by Larry King)