Overnight rate hits new record high of 70 percent

Overnight lending rate more than doubled to a new record high of 70 percent on Monday amidst a cash squeeze after the Central Bank of Nigeria (CBN)  last week withdrew naira liquidity as part of efforts to support the currency, dealers said.

Overnight lending rates spiked to 30 percent on Friday after the central bank drained around 300 billion naira ($1.7 bln) from the banking system.

The central bank, trying to curb naira liquidity as part of moves to support the currency hit by falling oil prices, last month hiked banks’ cash reserve ratio for holding private sector bank deposits to 20 percent from 15 percent