THE Central Bank of Nigeria (CBN), last week, offered for sale $600 million for at the Wholesale Dutch Auction System (WDAS), to strengthen the Naira.
Specifically, CBN offered $300 million on September 16 at the WDAS, with 16 banks participating in the bid at rates ranging from N155.76 to N155.79 per dollar.
Also, the apex bank offered $300 million again on September 18 at the WDAS, with 17 banks participating in the bid exercise at the same rate ranging from N155.76 to N155.79 per dollar.
The nation’s currency traded flat on the inter-bank market on Monday, as lenders exited the U.S. currency to cover their funding needs on the local currency amid tight Naira liquidity, occasioned by the withdrawal of N242 billion from the banking system two weeks over the new cash reserve requirement.
The naira closed at 161.9 to the greenback, the same level it closed over the previous weekend.
A source said that Naira shortage on the market caused banks to exit their dollar positions, to meet obligations in local currency.
“We see slowing demand for the dollar this week, which should help stabilise Naira within the present range,” another dealer said.
At the official foreign exchange window, the central bank sold $300 million at 155.76 to the dollar, the same amount and rate it auctioned last Wednesday.
However, Nigeria’s Naira advanced on Wednesday, as much as 1.2 per cent to 160.13 per dollar, trading 0.7 per cent stronger at 160.95 as of 12:58 p.m. in Lagos, the commercial capital, its highest closing level since August
Meanwhile, barely six months into the commencement of the payment of 3.6 per cent interest rate on savings accounts by banks, the directive seemed to have repeatedly not going down well with some financial institutions.
According to investigations by The Guardian, though majority of the financial institutions, which were reluctant in implementing the directive at first, later started with varying rates, while at present, others have refused to make an inch.
In a weekly release of rates obtainable in various banks by the Central Bank of Nigeria (CBN) as at September 13, five banks are still lagging behind the prescribed rate.
However, Heritage Bank Limited took over the position of highest interest rate paying bank (savings) at 3.99 per cent, from Wema Bank, which earlier overshot the stipulated rate by 0.15 per cent and presently averaging 3.76 per cent, while the remaining 14 banks maintained the 3.6 per cent directed by CBN.
There were indications however, that controversy over the averaging of the interest rate, as though there are many types of savings accounts that do not merit the directive is brewing, with stakeholders seeking further clarifications.
Still, stakeholders have reacted in varying degrees, baring their fangs over inadequate regulatory oversight, enforcement of decisions and consumer protection rights.
According to CBn’s Economic Report for the Month of July, the lingering disparity between banks’ deposit and lending rates during the review month trended downward, but with the exception of the average savings rate, which jumped to 2.45 per cent from 2.04 per cent in the preceding month.
The average prime and maximum lending rates fell by 0.03 and 1.53 percentage points to 16.53 and 23.05 per cent in the review month, respectively, while the spread between the weighted average term deposit and maximum lending rates narrowed by 1.34 percentage point to 16.89 per cent in July 2013.
Consequently, the margin between the average savings deposit and maximum lending rates narrowed by 1.94 percentage points to 20.60 per cent at the end of July 2013.
Source: The Guardian
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