The nation’s currency, the naira, on Friday depreciated against the dollar at the inter-bank market losing 23 kobo to close at N157.96/$ as against N157.73/$, data from Financial Markets Dealers Association (FMDA) has revealed.
Analysts attributed the weakening to short supply of the greenbacks as inflows from oil companies remain slow.
However, the Central Bank of Nigeria (CBN) last week offered and sold a total of $600 million to 40 successful banks at its bi-weekly Wholesale Dutch Auction System (WDAS) at N1557.74/$ and N155.75/$.
The local currency Friday remained stable at the official, bureau de change and parallel markets closing at N155.75/$, N160.0000/$, and N160.5000/$, respectively.
Money market on the other experienced liquidity squeeze as the Nigeria Inter-Bank Offered Rates (NIBOR) increased across tenor buckets.
For instance, overnight tenor climbed to 12.41 percent from 10.79 percent, the previous day. Similarly, seven-day and 30-day tenor increased to 12.75 percent and 13.00 percent from 11.08 percent and 11.33 percent, respectively, the previous day, data from Financial Markets Dealers Association (FMDA) revealed.
The analysts said the increase in the cost of borrowing among banks was due to mop up of excess liquidity from the system through Open Market Operation by the CBN.