Nigerian companies are to brace for more pressure on the Naira which is expected to continue this week given the volatility in international crude oil prices, analysts at Cowry Assets Management Limited have said.
Naira in the previous weeks has been under pressure due to outflows from the bond market by foreign investors.
However, there is no need to panic as the Central Bank of Nigeria (CBN) is expected to intervene by offering some greenbacks at its bi-weekly Wholesale Dutch Auction System (WDAS).
This is just as the CBN last week offered a total of $600 million to 38 deposit money banks that participated at the WDAS at N155.75/$. The intervention helped to cushion the effect of naira pressure. For instance, naira on Friday strengthened against the US dollar, gaining N2.10 kobo at the interbank market to close at N159.00/$ as against N161.10/$, the previous day, data from Financial Markets Dealers Association have indicated.
Read also: Pedabo admits new partner
Similarly, Naira on Monday, June 17, 2013 firmed against the US dollar, gaining N2.57 kobo at the interbank market to close at N160.12/$ compared to N162.70/$ on Friday, June 14, 2013. On Tuesday, naira gained N1.97 kobo against the dollar to close at N160.07/$ as against N160.12/$ the previous price, it also appreciated on Wednesday, against the dollar, gaining 22 kobo at the interbank market to close at N159.85/$ as against N160.07/$, the previous day.
Naira on Thursday weakened against the US dollar, losing N25 kobo at the interbank market to close at N161.10/$ compared to N159.85/$, the previous day
Naira also appreciated at both the Bureau De Change and parallel market by 0.31 percent (or N0.50) to N161.50 and N162 respectively. Against other major trading currencies, the British Pound Sterling and the Euro, the Naira also strengthened by 1.04 percent (or N2.34) and 0.71 percent (or N1.48) to N240.88 and N205.79 respectively, Cowry Assets weekly report has shown.
Current inflation rate still remain unchanged at 9 percent while foreign reserves stood at US$48.42 billion as at June 20, 2013.
According to the report, Nigerian Interbank Offer Rates, last week, spiked for all placement tenors as liquidity dried up amid delay disbursement from Federation Account Allocation Committee (FAAC), and purchases of treasury bills and forex by lenders.
CBN auctioned treasury bills totalling N125.31 billion via PMA (viz: 91-day bills worth N20.28 billion; 182-day bills worth N35.03 billion; and 364-day bills worth N70.00 billion). However, maturing treasury bills totalling N219.17 billion was injected into the system via PMA and OMO culminating in a transient moderation in rates within the week. The bills consisted of: 91-day bills worth N31.84 billion; 93-day bills worth N28.82 billion; 111-day bills worth N19.44 billion; 114-day bills worth N34.98 billion; 115-day bills worth N4.53 billion; 120-day bills worth N20.29 billion; 182-day bills worth N42.73 billion; and 364-day bills worth N60.00 billion. Overall, NIBOR for call, 30 days, 60 days and 90 days accelerated week-on-week to 12.58 percent (from 11.79 percent), 13.25 percent (from 12.46 percent), 13.50 percent (from 12.63 percent) and 13.75 percent (from 12.88 percent) respectively.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp