Story by Kayode Tokede
In its last intervention for the month of November, the Central Bank of Nigeria (CBN) on last Friday, made an intervention of $323.5million in the retail Secondary Market Intervention Sales (SMIS) and CNY 17.9million in the spot and short tenored forwards segment of the inter-bank foreign market.
The CBN Director in charge of Corporate Communications Department, Mr. Isaac Okorafor said that the intervention was for requests in the agricultural and raw materials sectors. The Chinese Yuan, on the other hand, was for Renminbi denominated Letters of Credit.
Okorafor further expressed satisfaction over the stability of the foreign exchange, which according to him, was largely due to sustained intervention by the Bank.
He assured that the Bank Management would remain committed to ensuring that all the sectors of the forex market continue to enjoy access to the needed foreign exchange especially during the forthcoming yuletide season.
Meanwhile, $1 last week exchanged for N358 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY1 exchanged at N48.
Nonetheless, the naira depreciated by 0.18per cent Week-Till-Date (WTD) to N362.75 against th dollar at the Investors & Exporters (I&E) Foreign Exchange window but closed flat at N360.00 against the dollar at the parallel market.
Elsewhere, total turnover at the I&E window decreased by 34.09per cent WTD to $644.77 million, with trades consummated within the N357.00 – 363.00 against the dollar band.
Trading in the Nigeria Treasury bills (NTB) market remained bullish this week with the average yield across instruments paring by 67 bps to 11.2per cent.
As with the prior week, most of the activities were localized to the NTB secondary market, where local corporates and individuals are the major players.
The average yield on NTBs in the secondary market declined by 136bps to 7.3per cent as market players looked to cover lost bids from the NTB primary market auction (PMA) which was oversubscribed.
Yields on OMO bills also pared, declining by 28bps to 13.1per cent as eligible market participants looked to invest excess maturities.
At the NTB PMA, instruments worth N150.60 billion – N20.37 billion of the 91DTM, N19.16 billion of the 182DTM, and N111.07 billion of the 364DTM –at respective stop rates of 6.50per cent (previously 7.80per cent auction), 7.20per cent (previously 9.00% auction) and 8.37per cent (previously 10per cent).
”We expect trading volumes to start to temper in the NTB market, as the average yield trends towards the single-digit level.
“However, the average OMO yield is expected to remain around the same level, moderately paring in the coming week. Overall, we expect overall volumes in the market to pare and market participants to take positions in Treasury bonds as has been witnessed over the past few weeks,” analysts at Cordros capital explained.