• Tuesday, March 05, 2024
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BusinessDay

Naira lost N0.24k to dollar despite CBN’s forex auction

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The nation’s currency naira yesterday weakened against the US dollar losing 20 kobo at the interbank market in spite of the Central Bank of Nigeria (CBN) foreign exchange auction.

The CBN yesterday offered a total of $400 million but sold a total of $398.7 million to 21 deposit money banks that participated in the bi-weekly Retail Dutch Auction System (RDAS) at the rate of N155.75/$.

However, naira yesterday closed at N164.80/$ as against N164.56/$ traded the previous day, data from Financial Markets Dealers Quotations (FMDQ) have shown.

Analysts attributed the naira depreciation to increased demand for dollar by end users as there was no major event that happened at the foreign exchange market. an analyst at Ecobank Transnational Inc. in Lagos who spoke with BusinessDay by phone described yesterday’s trading as a steady one.

It has been reported that the local currency is at risk of being devalued after President Goodluck Jonathan suspended the central bank governor last week, eroding confidence in monetary policy and sending the naira to a record low.

Interbank rates at the money market yesterday rose across tenor buckets by 0.41 percent form 12.27 percent the previous day to 12.32 percent.

Consequently, while the Nigeria Interbank Offered Rates (NIBOR) for call climbed from 11.45 percent the previous day to 11.54 percent, 7 days, 30 days, 60 days and 90 days tenors rose to 11.83, 12.08, 12.33 and 12.58 percent from 11.75, 12.00, 12.29, and 12.54 percents respectively, the

previous day, according to FMDQ data.

However, interbank rates are expected to moderate following maturing treasury bills worth N267.85 billion expected to hit the financial system.

The maturities will consist of: 35-day bills worth N72.53 billion; 119-day bills worth N85.01 billion; 91-day bills worth N20.65 billion; 120-day bills worth N30.65 billion; 128-day bills worth N79.65 billion.

 By: HOPE MOSES-ASHIKE