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Tuesday, 24 September 2013
Naira gains N1.80k as CBN sells $300m to 17 banks
The naira Monday firmed up the most against the US dollar gaining N1.80 kobo at the interbank market following the intervention of the Central Bank of Nigeria (CBN).
The nation’s currency, Monday closed at N159.40/$ compared to N161.20/$, traded on Friday last week, data from the Financial Markets Dealers Association (FMDA), have indicated.
The CBN Monday sold $300 million to 17 deposit money banks at N155.76/$ at its bi-weekly Wholesale Dutch Auction System (WDAS).
Analysts at Cowry Asset Management limited had anticipated that the naira would stabilise this week on the back of increase in Nigeria’s crude oil output and the likely increase in foreign portfolio investment inflows occasioned by the decision by U.S. Federal Reserves not to taper the monthly USD 85 billion Quantitative Easing.
However, the local currency remained stable at the official, bureau de change and parallel markets to close at N155.76/$, N162.50/$ and N163.00/$ respectively.
Money market Monday was awash with liquidity as the Nigerian Interbank Offered Rates (NIBOR) dropped across tenor buckets.
Consequently, call tenor went down to 13.50 percent from 15.66 percent on Friday last week. Similarly, 7 days, 30 days and 60 days dropped from 15.70 percent, 16.04 percent and 16.25 percent respectively on Friday to 13.41 percent, 13.70 percent and 14.16 percent respectively.
In anticipation of inflows from mature treasury bills and expected injection of Federation Account Allocation Committee (FAAC) funds the analysts expect interest rates to mellow down across tenor buckets this week.