Nigeria’s interbank lending rate rose to 12 percent on Friday from eight percent after bond and treasury bill purchases paid for by lenders drained banking system liquidity, traders said.

The central bank sold 25 billion naira ($82 million) worth of 363-day treasury bills on Friday, while lenders paid for bonds bought at an auction on Wednesday.

Money market rates stood at 15 percent last week. They dropped to 8 percent after the central bank injected 89.96 billion naira to settle matured treasury bills on Thursday.

“We see interbank rate climbing to 20 percent at the start of next week because of expected central bank intervention in the foreign exchange market,” one trader told Reuters.

The central bank has been using treasuries to mop-up liquidity from the banking system in a bid to also curb pressure on the currency.

Market liquidity opened at 28.69 billion naira deficit on Thursday, traders said, narrowing the deficit which widened to 78.29 billion on Monday. ($1 = 304.95 naira) (Reuters)