Interbank lending rates closed flat at a low of 2.5 percent on average in the week to Friday due to excess liquidity in the system traders said.
The secured Open Buy Back (OBB), overnight and call money were all stable at 2.5 percent with more banks willing to place their funds than those ready to take, traders said.
Liquidity in the system was boosted by inflows from monthly budgetary allocations to government agencies and the repayment of about 75 billion naira ($506 million) in matured treasury bills on Thursday, traders said.
"More banks were willing to give out money, but there were few takers. The only alternative was for them to place there surplus funds with the central bank at a lower rate (2.0) percent," one dealer said.
Dealers said the system was in surplus of over 150 billion naira after state-run oil firm NNPC sold an unspecified amount of dollars to some banks to get the naira for its operations.
Nigerian banks depend largely on the cyclical release of budgetary allocations to the three tiers of government to fund their operations.
The release two weeks ago of billions of naira in budgetary allocations and subsequent inflows from the excess crude account have continued to help the system remain sufficiently liquid.
"Rates are expected to adjust slightly up next week as a result of anticipated outflow of cash to treasury bills and forex purchases," another dealer said.
