BUSINESS
Naira steady at 367/$1, strengthens against other currencies
The Nigerian currency, Naira on Monday remains steadied at 367 to a US Dollar at the parallel market but garner two points against Euro to close at 417 compare to 420 traded over the weekend, and stabilised at 470 per Pound Sterling.
The local currency, also, remained stable at the Central Bank of Nigeria (CBN) official rate of 305.95, the same rate it has been selling since last week
At the Investors and Exporters FX window, the local currency opened at a depreciated rate of 365.57 per dollar against 364.39 opened on Friday, which represented 0.32 per cent difference and closed at an appreciable rate of 362.21 per dollar compare to 362.83 that it did as at the close of market last Friday.
The naira, at the interbank forex market sold at a better rate of 324.50 to a dollar against 324.63 traded at the close of the forex market last week, but depreciated slightly to 424.12 per pound compare to 419.74 traded, and stood at 371.48 against 370.24 exchanged at the same segment of the foreign exchange market.
Although, the local currency last week sustained gained points against the Dollar but Forex dealers, anticipate further gains this week.
They also, expect the interbank rate to climb to 20 per cent as financial activities opened for this week, even as the apex bank is expected to intervene in the foreign exchange market.
It would be recalled that the Nigeria’s interbank lending rate rose to about 15 per cent on Friday, after increasing from eight to 12 per cent in the preceding week.
Forex traders, however, linked this development to the payment made by commercial banks for dollar and Treasury bill purchases, thereby bringing down liquidity.
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 per cent in the preceding week. They dropped to 8 per cent after the central bank injected 89.96 billion naira to settle matured treasury bills on Thursday.
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 a week ago.
Forex dealers said that the interbank rate traded above the 40 per cent level on Wednesday because of the Treasury bill auction. However, anticipating borrowing costs to rise next week, as the central bank is likely to continue its forex interventions to stabilize the naira.
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