Naira appreciates to N306.95/$ as CBN boosts forex market with $210m

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Story by Kayode Tokede

The Naira at the interbank market of the Central Bank of Nigeria (CBN) appreciated to N306.95 against the dollar on Tuesday amid weekly intervention from the apex banking regulating body.

The Naira since the beginning of April was trading at N307 against the dollar despite the apex bank sustained injection at both the official market and Bureaux De Change (BDC).

The Naira against the Dollar appreciated by 0.02per cent to N360.23 in the Investors & Exporters Foreign Exchange (I &E FX) window, but closed flat at N360.00 at the parallel market, the rate at which it opened early in the month.

Total turnover in the I& E FX decreased significantly by 73.31per cent to $111.79 million, with trades consummated within the N356.00-N362.00/Dollar band.

The Naira on Tuesday, April 16, 2019, exchanged at an average of N360/$1 in the BDC segment of the market.

Meanwhile, the CBN has injected $210 million to the interbank segment of the Foreign Exchange Market.

According to figures obtained from the Bank on Tuesday, authorized dealers in the wholesale segment of the market were offered the sum of $100million.

Similarly, the Small and Medium Enterprises (SMEs) segment received the sum of $55 million. Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated the sum of $55 million.

The Director, Corporate Communications Department, Mr. Isaac Okorafor confirmed the transactions adding that the effort of the Bank had helped to reduce exchange rate pressures across all segments of the market.

According to him, the stability of the exchange rate underscored the level of confidence investors and the public had in the Naira.

The overnight lending rate crashed 2,550 basis points to close at 17.43per cent as market players were able to access liquidity from the CBNs Standing Lending Facility window.

Activities in the treasury bills market were mixed, albeit with a bearish tilt, as average yield widened by two basis points to close at 13.41per cent.

Selloffs of the 65DTM (+65 basis points) bill led to yield expansion at the short (+10 basis points) end of the curve. On the flip side, yield contracted at the mid (- one basis points) segment owing to demand for the 107DTM (-96 basis points) bill.

Yield at the long end of the curve was flat. At the NTB auction scheduled for tomorrow, the CBN will offer N58.49 billion – N5.85 billion of the 91-day, N29.25 billion of the 182-day, and N23.40 billion of the 364-day – worth of bills to the market.

Trading in the bond market was mixed, as average yield shed a marginal one basis point to close at 14.07per cent. Demand was evident at the short (-six basis points) and long (-four basis points) end of the curve, with respective yields on the JUL-2021 (-20 basis points) and MAR-2036 (-14 basis points) bills contracting. Conversely, a selloff of the FEB-2028 (+15 basis points) bond led to yield expansion at the mid (+six basis points) segment.

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