Naira gains over Euro, steadies against Dollar, Pound at parallel market

The Nigerian currency, Naira, ended foreign exchange trading week at the parallel market on a positive note, gaining over the Euro, while steadied against the US Dollar and Pound Sterling, during the week under review.

The Naira, as at close of the interbank official foreign exchange market on Friday stood at 305.65 to the Dollar, representing 0.02 per cent drop from traded rate of 305.60 on Thursday and Wednesday, which was lower than 305.55 on Tuesday and Monday.

On the other hand, the local currency maintained the 363 per US Dollar that has been selling since the forex market opened last Monday at the unofficial forex market, but gained slightly against the Euro to close at 423 against 425 that was sold in most days during the week even though it steadied at 475 to the Pound sterling.

However, the Importers and Exporters FX window on Friday opened trading an appreciated figure of 359.67 compared to Thursday 359.75 to the dollar, gaining 0.02 per cent but ended at a weaker rate of 360.32 against 360.27, representing 0.1 per cent.

It is however, note worthy that the Federal Government of Nigeria through the Central Bank of Nigeria (CBN), during the week under review tightened liquidity to support the nation’s currency, Naira, through the sales of fresh N98 billion worth in Treasury Bills (TB) securities on Thursday, after it auctioned N133.25 billion on Wednesday.

In fact, the apex bank, on Thursday sold the 91-day bill at a higher interest rate of 16 per cent plus a 196-day bill at 17.81 percent.

Traders, however, explained that money market has been short of liquidity for more than a week due to mopping up of the local currency following the recent maturity of some N86 billion of treasury securities.

The central bank on Wednesday auctioned N133.78 billion worth of treasury bills, as the apex bank offering N32.4 billion in three-month paper, N35 billion in six-month bill and N66.38 billion in one-year note. The bank issues treasury bills twice a month to help the government to finance its budget deficit, curb money supply growth and provide an avenue for lenders to manage liquidity.

Meanwhile, the Consumer Price Index (CPI) which measures inflation rate slowed to 15.98 per cent in September, 0.03 basis points from 16.01 per cent in August, making it the eight consecutive declines in the rate since January 2017, and latest data by the National Bureau of Statistics (NBS) has revealed.

The bureau said food price pressure continued into September as all major food sub-indexes increased, stressing that  separate food price index showed inflation at 20.32 per cent in September, up from 20.25 per cent in August,

According to NBS, “On a month-on-month basis, the Headline index increased by 0.78 percent in September 2017, 0.19 per cent points lower from the rate of 0.97percent recorded in August.

“The percentage change in the average composite CPI for the twelve-month period ending in September2017 over the average of the CPI for the previous twelve-month period was 17.17 per cent, showing 0.16 per cent point lower from 17.33 per cent recorded in August 2017.

“The Urban index rose by 16.18 percent (year-on-year) in September2017, up by 0.05 percent point from 16.13 per cent recorded in August and the Rural index increased by 15.81 percent in September down from 15.91 per cent in August.

The report by NBS explained further that, “Food price pressure continued into September as all major food sub-indexes increased. The Food Index increased by 20.32 per cent (year-on-year) in September, up marginally by 0.07 per cent points from the rate recorded in August (20.25 per cent).