The interbank lending rate eased to 15 per cent on Friday, down from nearly 40 per cent for overnight lending a week ago, as the disbursement of August budget allocations to Federal Government agencies boosted market liquidity.

Overall the market had a liquidity surplus of N283.61bn at Friday’s opening, compared with the previous week’s deficit of N128bn, Reuters reported.

The Federal Government distributes money monthly to the three tiers of government from the centrally held account fed by oil revenues and taxes. This helps to provide liquidity and cut borrowing costs for the banking sector.

Traders said about N231bn ($733.33m) was injected into the banking system late on Thursday as states and local government were paid their budget portions.

The sale of N201bn and N206bn Treasury bills by the CBN on Thursday and Friday did not fully offset the positive impact of the cash injection on market liquidity, dealers said. The bills were sold at yields of between 18 and 18.5 per cent.

“We expect the central bank to continue to sell treasury bills in the coming days in its bid to reduce pressure on the local currency, with the consequent impact on interbank rate,” one dealer said.

A persistent shortage of dollars in the official market, which effectively forces importers to use the unofficial market had pushed the naira to a new record low of 436/dollar at the parallel market.