CBN boosts forex market with $100m as buoyancy continues at I&E window

For the week ended 2d February, 2018, the Central Bank o Nigeria further enhanced the foreign exchange market with the injection of USD210 million into the FX market, the fund comprised of USD100 million, USD55m, and USD555m disbursements to the wholesale, SMEs, and invisibles windows, respectively.

However, the N305-306 official rate was rates was sustained through the week following CBN’s intervention sales with USD210m to the various segments of the FX market.

The NGN appreciated against the USD by 0.27% to NGN363 in the parallel market, while it depreciated by 0.10 per cent to NGN360.70 in the I&E FX window.

Trades in the I&E window declined by 10.68 per cent to USD1.06 billion, compared to USD1.19 bn recorded in similar period in the preceding week .

However, despite N22.33bn worth of OMO bills that matured, the Overnight and Open-Buy-Back rates ended the week at 12.17 per cent and 11.60 per cent from 5.33 per cent and 4.50 per cent, following CBN’s auction of N490bn and N355 worth of OMO bill and NTB, respectively.

Even as experts sustain call to bridge the divergent rates of the Naira, the NGN continued to trade within the N305-306 official rate levels and N360.70 I&E window.

Expected maturity and settlement of the federal government’s OMO worth N67.68 billion Thursday , 8th February, 2018 has been tipped as one of the developments in the economy that would shape market operations in the week.

The OMO maturity is however expected to impact on liquidity level and further dictate tune of money market and fixed income instruments, OBB, overnight rates ,T=-Bills and other termed papers, as seen in the out gone week

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Meanwhile, activities in the bond market remained mixed in the week ended 2nd February, While the bond market was bullish at the short to mid end of the curve, it was bearish at the longer end of the curve week. Average yield inched higher by 1 bp w/w to 13.42 per cent. Notably, the MAR 2036 (+14 bps to 13.38%) bond recorded the biggest yield expansion.

Stories by Bonny Amadi