This week, there is expectation of more stability of the naira following likely improvement in supply occasioned by the re-opening of Trans Niger crude oil pipeline by Shell Petroleum Development Company of Nigeria Limited, having completed its repairs, analysts at Cowry Asset Management Limited have said.
After trading on Friday, the naira strengthened slightly against the US dollar gaining N0.03 kobo at the inter-bank market.
Naira on Friday closed at N159.97/$ compared to N160.00/$ the previous day, data from the Financial Markets Dealers Association (FMDA) have revealed.
On Thursday, naira strengthened against the US dollar gaining 20 kobo at the inter-bank market while on Monday, it eased slightly against the US dollar losing 01 kobo also at the inter-bank market.
The Central Bank of Nigeria (CBN) sold $276.38 million worth of forex to authorised dealers on Monday as Wednesday was declared public holiday to mark Eid-el-Kabir. However, the local currency lost grounds to the greenback at the official market having depreciated 0.03 % (or N0.04) to close at N155.81/USD.
However, the local currency remained stable at the bureau de change and parallel market closing at N162.00/$ and N163.00/$, respectively.
Compared against other major currencies, the naira weakened against the British pound sterling and the Euro by 1.37% (or N3.40) and 0.84% (or N1.77) to close at N252.24 and N213.16, respectively.
The weekly report of Cowry Asset noted that in the just concluded week, Nigerian Inter-Bank Offered Rates (NIBOR) decelerated for all tenor buckets as float balances from recently disbursed FAAC funds persisted adding to redeemed treasury bills. Maturing treasury bills worth N156.71 billion entered the financial system. The bills consisted of 182-day bills worth N63.72 billion; and 183-day bills worth N93 billion. The inflows in treasury bills outstripped outflows in auctioned treasury bills valued at N144.55 billion viz: 98-day bills worth N34.01 billion; 147-day bills worth N43.38 billion; and 168-day bills worth N67.16 billion via Open Market Operations.
Consequently, NIBOR for call, 30 days, 60 days and 90 days moderated to 11.50% (from 11.58%), 11.04% (from 13.38%), 11.29% (from 13.79%) and 11.54% (from 14.04%), respectively.
In the current week, N202.61 billion worth of maturing treasury bill will mature on Thursday, October 24. The maturities will consist of 91-day bills worth N32.89 billion; 136-day bills worth N13.50 billion; 161-day bills worth N47.66 billion; 164-day bills worth N47.18 billion; 182-day bills worth N30 billion; and 364-day bills worth N31.39 billion.
“We expect rates to mellow as the financial system will be awash with liquidity”, the analysts said.
Source: BusinessDay
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