By IDNN Economy Desk
Nigeria’s overnight lending rate fell by 100 basis points this week, traders said, reflecting excess liquidity in the banking system following the CBN’s rate cut to 27%.
Market sources told Reuters the decline signals both the impact of recent policy easing and improving liquidity conditions.
How CBN Policy Is Filtering Through
The Central Bank of Nigeria last week cut its key lending rate for the first time since 2020, lowering it by 50 basis points. The move, designed to spur credit growth, is now translating into cheaper interbank rates. Similar patterns were observed after previous CBN interventions in 2015 and 2020.
Implications for Banks and Borrowers
Analysts say the lower overnight rate eases pressure on commercial banks and could filter into cheaper lending for businesses and consumers. But they caution that excess liquidity, if unchecked, could stoke inflationary pressures later in the year.
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