• Friday, December 08, 2023
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Pressure on foreign exchange reserve to weaken naira this week


There are indications that pressure on naira will heighten this week on back of recent pressure on the foreign exchange reserves due to volatility in international oil prices as well as forex demand by end users, analysts at Cowry Asset Management Limited have said.

Gross external reserve as at June 6, 2013 stood at $48,423,378,677 compared to $48,425,020,410 the previous day.

Naira on Friday eased significantly against the US dollar losing 75 kobo at the inter-bank market to close at N159.75/$ as against N159.00/$, the previous day, data from Financial Markets Dealers Association have shown.

Analysts attributed the depreciation of naira to increased demand for the greenback by end users.

At its bi-weekly Wholesale Dutch Auction System (WDAS), the Central Bank of Nigeria (CBN) offered and sold a total of $650 million to authorised dealers.

The weekly report of Cowry Asset shows that at the Nigerian Inter-Bank Foreign Exchange market, the local currency also lost, week-on-week, by 0.42 percent (or N0.66) to N159.38 against the greenback partly despite dollar sales by oil companies to lenders in line with analysts’ expectations. Nigerian subsidiaries of Chevron, Eni and Addax sold $28.8 million, $23 million and $13 million, respectively. At the bureau de change and the parallel market, the Nigerian legal tender also weakened by 0.19 percent (or N0.30) and 0.31 percent (or N0.50) N160/$ and N160.50/$, respectively, as at Friday.

In the just concluded week, financial system liquidity received a boost after treasury bills worth N325.51 billion matured via Open Market Operations (OMO). The maturities consisted of: 91-day bills worth N32.97 billion, 119-day bills worth N208.39 billion, 182-day bills worth N24.15 billion and 364-day bills worth N60 billion. The inflows exceeded outflows via auctioned treasury bills worth N137.97 billion; viz: 91-day bills worth N22.97 billion, 182-day bills worth N30 billion and 364-day bills worth N85 billion.

Consequently, Nigerian Inter-Bank Offered Rates (NIBOR) decreased for all tenor buckets: call, 30 days, 60 days and 90 days moderated to 10.25 percent (from 10.58 percent), 10.92 percent (from 11.13 percent), 11.16 percent (from 11.42 percent) and 11.42 percent (from 11.66 percent), respectively.