Naira firms against dollar as CBN intervenes with $398.4m

The naira yesterday gained N0.92k against the US dollar at the inter-bank market following the intervention of the Central Bank of Nigeria (CBN) through foreign exchange auction of $398.4 million.

This is amid depleting external reserves which as at February 28, 2014 stood at $40.11 billion from $40.25 billion the previous day.

The CBN yesterday offered a total of $400 million but sold a total of $398.4 million to 21 deposit money banks at the rate of N155.75/$ at bi-weekly Retail Dutch Auction System (RDAS) window.

Consequently, the local currency yesterday closed at N163.91/$ compared to N164.83 traded on Friday last week at the inter-bank, data from Financial Markets Dealers Quotations (FMDQ) have revealed.

At the parallel market, naira gained 50 kobo against the dollar as it closed at N171.50 as against N172 last week Friday.

Analysts had anticipated pressure on naira would moderate this week following the expected defence of the local currency by the CBN.

Inter-bank rates at the money market yesterday rose by 3.37 percent from 11.86 percent on Friday last week to 12.26 percent yesterday.

Consequently, the Nigeria Inter-Bank Offered Rates (NIBOR) for call climbed from 11.04 percent on Friday to 11.29 percent. Similarly, 7 days, 30 days, 60 days and 90 days tenors rose to 11.66 percent, 11.95 percent, 12.29 percent and 12.58 percent from 11.37 percent, 11.62 percent, 11.87 percent, and 12.12 percent, respectively, the previous day, according to FMDQ data.

However, inter-bank rates are expected to moderate following inflows from treasury bills worth N328.30 billion which will mature on Thursday, March 6, 2014. The bills will consist of 91-day bills worth N22.97 billion; 97-day bills worth N39.76 billion; 98-day bills worth N16.76 billion; 153-day bills worth N49.34 billion; 155-day bills worth N42.35 billion; 182-day bills worth N40.00 billion; and 364-day bills worth N117.12 billion.

HOPE MOSES-ASHIKE