Naira firms against dollar on CBN’s $399.9 intervention

The naira yester¬day strengthened against the US dol¬lar gaining N0.45k as the Central Bank of Nige¬ria (CBN) intervened with a total of $399.9 billion.

The CBN yesterday of¬fered a total of $400 mil¬lion but sold a total of $399.9 million to 20 deposit money banks at the rate of N155.75/$ at its twice week¬ly Retail Dutch Auction System (RDAS) window.

Consequently, the naira yesterday closed at N164.40/$ compared to N164.85/$ traded on Fri¬day last week, data from Financial Markets Dealers Quotations (FMDQ) have revealed.

Analysts had anticipated a moderation in naira pres¬sure this week following anticipated support from the monetary authority.

Meanwhile, external reserves have further dropped to $39.29 billion from $39.40 billion the pre¬vious day.

Inter-bank rates yester¬day rose across tenor buck¬ets by 19.7 percent follow¬ing N30 billion Treasury bill via Open Market Operation (OMO) auction by the CBN.

Victor Ofili of the re¬search desk of Cowry Asset Management Limited also confirmed to BusinessDay on phone that the combina¬tion of OMO auction and foreign exchange auction contributed to the increase in Nigeria Inter-Bank Of¬fered Rates (NIBOR).

Consequently, call tenor climbed from 11.00 percent on Friday to 13.45 percent. Similarly, 7 days, 30 days, 60 days and 90 days tenors rose to 13.58 percent, 13.95 percent, 14.16 percent and 14.41 per¬cent from 11.25 percent, 11.54 percent, 11.79 percent and 12.08 percent, respectively, on Friday, data from Financial Markets Dealers Quotations (FMDQ) have shown.