Interest rates may go up this week following sustained pressure on liquidity (cash availability) in the banking industry last week.
This development, according to financial sector operators, was the direct fallout from two major policies rolled out in the past one week by the Central Bank of Nigeria (CBN) in its bid to shore up Naira value against major currencies.
The apex bank had directed banks to stop taking US Dollar deposits in cash. It also mandated the banks to deposit with it the Naira value for their customers’ Dollar demand 48 hours in advance.
These policies, especially the last one, sucked up about N330 billion from the banks between Wednesday and Thursday, last week, crashing cash surplus in the banks to just N25 billion by Friday as against N360 billion opening cash on Monday.
Already the liquidity crunch has substantially affected the interbank rates at the weekend, rising from less than 10 per cent week’s opening rate.