Nigerian interbank lending rates rose sharply by around 100 percentage points on Thursday, as commercial lenders scrambled for cash to pay for bond purchases and cover their positions, traders said.
Overnight lending rates rose to around 300 percent from 200 percent at the end of Wednesday, as Naira liquidity dried up in the banking system and some banks were forced to borrow from the central bank.
Nigeria raised N105.32 billion ($345 million) from bond sales this week, and payment for the debt sale was due on Thursday, draining liquidity in the market and pushing further up the cost of money in the market.
“The market is currently short of funds with major placers asking for a higher rate on their money as a result of pressure from those who need cash to cover their positions,” one trader said.
The central bank has consistently sold dollars at both the spot and forward markets, and required banks to pay for the purchase.
Dipo Olowookere 
Adedapo Adesanya