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Nigeria Lending Rate Falls Flat; to Issue Eurobond
Nigeria Lending Rate Falls Flat; to Issue Eurobond

Nigeria Lending Rate Falls Flat; to Issue Eurobond

Nigeria Lending Rate Falls Flat; to Issue Eurobond

Nigeria’s overnight interbank rate fell after the central bank repaid matured treasury bills and cash meant for government’s capital projects reached the system, traders said.
Overnight lending rates fell to 11%, below the central bank’s benchmark 14%, from 15.5% the day before. Rates had risen above 100% at the start of the week because of a central bank dollar auction, Reuters reported.
Traders said the bank repaid about 138.7 billion naira ($456 million) in matured treasury bills on Thursday to boost liquidity. They also said the market was flush with cash after the central bank sold fewer dollars than expected and returned excess naira.
The bank sold $313 million at a special auction meant to clear a backlog of dollar demand .
Traders said an unspecified amount of naira was released on Friday to fund government spending on capital projects and that additional inflows was expected.
 To Issue Eurobond
Nigerian government plans to sell a Eurobond worth around $1 billion before the end of the year and is in the process of appointing managers for the sale, Finance Minister Kemi Adeosun said on Friday.
The Eurobond is part of Nigeria’s plans to borrow a total of 1.8 trillion naira ($5.8 billion) from abroad and at home to fund an expected budget deficit of 2.2 trillion naira this year.
“We are appointing parties this week, we are hoping to come before the end of the year,” Adeosun told Naija247news at the sidelines of an investment conference at the London Stock Exchange. She gave no details.
“We have headroom and we are very fortunate in that regard, we have very low debt to GDP ratio,” she later told the conference.
Africa’s biggest economy has slipped into recession for the first time in 25 years, brought on by low oil prices that have cut government revenues and weakened the OPEC member’s currency. Crude oil sales make up 70% of national income.
The African Development Bank has said it will help Nigeria to overcome its recession. The lender’s board is expected to grant a $1 billion loan at a rate of around 1.2%, which Nigeria could use to help plug its deficit.
The finance minister said she hoped oil prices would stabalize around $42 and $50 per barrel.
Adeosun also said the government had spent 770 billion naira on capital expenditures since President Muhammadu Buhari signed the 2016 budget in May.

 

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