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Tuesday, 5 November 2013
Naira firms against dollar as CBN sells $343.1m at RDAS
The Nigerian currency, the naira Monday strengthened against the US dollar following the intervention of the Central Bank of Nigeria (CBN) at the Retail Dutch Auction System (RDAS) window.
The CBN on Monday offered a total of $350 million but sold $343.1 million to 20 deposit money banks at the rate of N155.71/$ at its bi-weekly RDAS.
Consequently, the naira gained16 kobo at the interbank market to close at N158.60/$ compared to N158.77/$ on Friday last week, data from the Financial Markets Dealers Association (FMDA) have shown.
At the official market, the naira firmed up against the dollar gaining N0.09 kobo as it closed at N155.71/$ as against N155.80/$ on Wednesday last week.
The naira remained stable at the parallel market and bureau de change closing at N167.00/$ and N162.00/$ respectively.
The result of Monday’s foreign exchange trading however contradicts analysts expectation that pressure on the naira may continue at the interbank and parallel markets following expected demand pressure and paucity of supply in both markets this week.
The money market on Monday experienced liquidity squeeze as the Nigerian Interbank Offered Rates (NIBOR) rose across tenor bucket.
Consequently, call tenor rose to 10.83 percent from 10.58 percent on Friday day last week. In the same manner, 7 day, 30 day, 60 day and 90 day tenors climbed from 11.12 percent, 11.75 percent, 12.16 percent and 12.58 percent the previous day to 11.25 percent, 11.08 percent, 12.50 percent and 12.91 percent respectively.