Naira reverses loss at inter-bank as BDCs get $20m from IMTO

… CBN raises N177.2bn Treasury bills

Naira on Thursday reverses the loss made the previous day at the inter-bank market to N305.25k from N315.00 on Wednesday, according to data obtained from FMDQ.

At the unregulated parallel market, the local currency remained stable, closing at N498 per U.S. dollar, the same level it was since last week.

Over 2,500 Bureau De Change (BDC) operators on Thursday qualified for dollar sales to the volume of $20 million at $8,000 each by Travelex, a global currency dealer. They purchased at the rate of N381 and will sell at N399/$ as they have agreed.

Consequently, naira is expected to trade within a recent range after the Central Bank of Nigeria (CBN) released around $660 million to quench greenback shortages in Africa’s biggest economy.

“The pressure on the market has reduced slightly because of the recent dollar sales by the central bank to clear part of the backlog of demand and the regular sales to bureaux de change by Travelex,” one trader told Reuters.

On Wednesday, Nigeria sold dollars in a special auction aimed at clearing the backlog of dollar obligations of manufacturers, airlines, the agriculture and petroleum sectors.

Nigeria’s central bank raised 177.22 billion naira via the sale on Wednesday of a one-year treasury bill but had to offer a yield well in excess of its benchmark interest rate to lure investors in the face of galloping inflation.

The one-year bill yielded 18.54 percent, in line with December’s 18.55 percent annual inflation rate but far higher than the central bank’s benchmark interest rate of 14 percent.

The auction on Wednesday was the third this year at which the central bank has offered the one-year bill at a yield of above 18 percent. The central bank had previously sold short-term debt at yields below inflation for months.

 

HOPE MOSES-ASHIKE