Naira eases against dollar on foreign portfolio outflow

The naira yesterday weakened against the US dollar losing 65 kobo at the inter-bank market to close at N159.55/$ compared to N158.90/$ the previous day, data from Financial Markets Dealers Association have indicated.

An analyst at Ecobank told BusinessDay on telephone that naira depreciation may be attributed to foreign investors withdrawing their investment from bond market.

The Central Bank of Nigeria (CBN) on Monday offered and sold a total of $300 million to 20 deposit money banks that participated at its by-weekly Wholesale Dutch Auction System (WDAS) at N155.75/$.

However, the naira remained stable at official, bureau de change and parallel markets closing at N155.75/$, N160,00/$ and N160.50/$, respectively.

Money market yesterday experienced liquidity squeeze at the Nigerian Inter-Bank Offered Rates (NIBOR) increased across tenor buckets.

For instance, call tenor climbed to 13.16 percent from 10.91 percent on Friday. Similarly, 7 days and 30 days tenor increased to 13.33 percent and 13.58 percent from 11.33 percent and 11.83 percent, respectively, the previous day.

The analysts believe that rates will moderate today after the payment of matured Treasury bills of about N80 billion by the CBN through Open Market Operation (OMO).