Naira appreciates to N305.95/Dollar at inter-bank market

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 On Thursday at inter-bank trades, Naira appreciated to N305.95 against the  Dollar from N306/Dollar it opened this week, days after Central Bank of Nigeria (CBN) injected $210 million into the foreign exchange market.

At the Investors and Exporters (I&E) foreign exchange window, it opened at N360.06/Dollar, traded high at N361.30/Dollar and eventually closed at N360.66/Dollar, representing a 0.07 per cent depreciation against Wednesday’s closing price.

Meanwhile, the Naira in three days trading closed at N362 against the dollar at the parallel market as sentiment trading persisted.

The Naira had opened at N363/dollar on Monday.

The Naira has been trading between N360 and N363 in recent weeks as the apex bank continued to intervene in the foreign exchange market once or twice on weekly basis.

The regulator had injected over $500million into the foreign exchange market between penultimate Friday and last Monday.

Analysts have said that the Naira is likely to remain stable against the greenback   this week as demand for the US currency weakens whenever the unit trades below N360 per dollar.

“the official and the parallel market exchange rate are expected to converge mildly in the course of the year, Naira is projected to strengthen to between N330 and N340/Dollar in the parallel market while the official exchange rate remains at between N306 to N307/Dollar.

“Furthermore, flexible exchange rates in favour of some selected sectors of the economy and for various reasons are expected to persist, and administrative measures introduced by the CBN to ensure liquidity of foreign exchange are expected to continue in 2018.”

Meanwhile, figures obtained from the CBN indicated that out of the last intervention, it offered $100m to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises segment received the sum of $55million.

Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance, among others, were also allocated the sum of $55million.

The bank’s Acting Director, Corporate Communications, Mr. Isaac Okorafor, confirmed the figures, adding that those who made bids in the wholesale window would receive value for the bids on Tuesday.

He reassured the public that the bank would continue to intervene in the interbank foreign exchange market in line with its quest to sustain liquidity in the market and maintain stability.

The Overnight and Open Buy Back rates shed -217 basis points and -308 basis points to close at 9.83per cent and 10.17per cent respectively. Money market rates fell today despite the Open Market Operation (OMO) auction that took place where CBN sold N67billion of 182-day bills at a stop rate of 14.40per cent.

The fall in rates may not be unconnected with the N56billion worth of OMO bills that hit the system today.

Investors’ sentiments in the bond market were mixed on Thursday. While yields increased at the short end of the curve, it declined at the tail end of the curve.

The yield on the 7-yr benchmark bond rose by six basis points to close at 13.74per cent but the yield on the 10-yr benchmark bonds shed -5bps to close at 13.79per cent. However, the yield on the 5-yr bond closed flat at 13.55per cent.


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