• Thursday, December 07, 2023
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Inter-bank rates rise 15.78% as naira loses against dollar at forex market

Inter-bank rates flat on maturing bills, budget flows

The rates at which banks borrow from each other, called inter-bank rates, on Thursday rose by 15.78 percent from average of 57.18 percent the previous day to 63.12 percent, according to data obtained from Financial Markets Dealers Quotations (FMDQ).

A breakdown of the movement of the rate show that overnight tenor increased by 4.09 percent from 12.37 percent to 16.46 percent, 1 month tenor climbed to 14.77 percent from 14.01 percent, representing 0.7 percent, 3 months tenor rose to 15.20 by 0.5 percent from 14.63 percent the previous day, and 6 months tenor increased from 16.16 percent the previous day to 16.67 percent, representing 0.5 percent increase.

Analysts at Cowry As- sets had anticipated an increase in the inter-bank rates this week following expected strain in system liquidity as combined funds demand for purchase of treasury bills and foreign exchange would exceed inflows from treasury bills maturities.

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The Central Bank Nigeria (CBN) auctioned N192.40 billion via the primary market, viz: 9-day bills worth N45.18 billion; 182-day bills worth N30 billion and 364- day bills worth N117.22 billion while an equivalent amount of treasury bills matured on Thursday, February 05, 2015.

However, naira on Thursday depreciated by N0.20k/$ or 0.1 percent against the US dollar at the inter-bank foreign ex- change market. After trading on Thurs- day, the local currency closed at N192.60k/$ com- pared to N192.40k/$ the previous day, data from FMDQ indicated. At the parallel market, the nation’s currency weakened by N0.50k/$ or 0.2 percent against the dollar as it closed at N211/$ as against N210.50k/$ the previous day.

Meanwhile, analysts expect foreign exchange rates to come down today as the CBN fulfils its intervention promise. The apex bank had on Tuesday announced its move to sell an additional $30,000 to interested BDCs today in a move to shore up liquidity in the foreign exchange market as naira continues to face intense pressure on excessive dollar demand. El-Amin Gwadabe, national president of Bureau De Change Association, who spoke with Business- Day by phone last night, admitted that interventions of the regulator so far is making gradual impact, adding that naira would have exchanged for N230 if not for the measures of the CBN.