FG set to raise N450b bonds, as Naira gains

The Naira, on Wednesday, returned to profitability, as it gained a appoint to close at 365, against 366 per dollar traded at the parallel market on Tuesday, even as the Federal Government of Nigeria set to raise between N360 billion and N450 billion ($1.18bn-$1.48bn) in sovereign bonds by third quarter (Q3).

The Debt Management Office (DMO) on Wednesday disclosed that the intended N450 billion bonds will be maturing between five and 20 years in the Q3, 2017.

However, the local currency, at the parallel market on Wednesday depreciated further to 468 against 467 sold on Tuesday per Pound and Euro at 412 against 410 in last two weeks.

At the official forex market, the naira remained unchanged at 305.95 the same rate it traded on Tuesday and Monday.

Also, at the Investors & Exporters Foreign Exchange (I&E FX) window, the naira, opened at a depreciated rate of 365.47 compare to 364.66 opened on Tuesday, but gained to close at 363.33 against 366.31 did the previous day.

Explaining how the federal government plan to raise the N450 debt through bonds, the debt office said it would auction 90-120 billion naira in the five-year note and 135-165 billion in the 10-year and 20-year debt between July and September.

The Africa’s biggest economy issues bonds each month to help fund its budget deficit, support the local debt market and maintain a benchmark for companies to follow.

The West African country expects a budget deficit of N2.36 trillion this year, as it tries to spend its way out of a recession. It expects to raise money to cover more than half the gap from the local market.

Although, as part of its effort in ensuring liquidity and stability in the market, earlier in the week, the Central Bank of Nigeria (CBN) had boosted the foreign exchange market with the total sum of $195 million.

The breakdown showed that the sum of $100 million was offered to authorized dealers in the wholesale window, just as the Small and Medium Enterprises (SMEs) window was allocated the sum of $50 million. Those seeking forex for the purpose of BTA/PTA, tuition and medical bills, among other invisibles, received the sum of $45 million.

The Acting Director, Corporate Communications at the CBN, Isaac Okorafor, who confirmed the figures, said the Bank’s continued intervention was aimed at strengthening the international value of the Naira, while ensuring accessibility to the greenback by customers who required it for genuine purposes.

It would be recalled that the CBN, in the last round of forex intervention in the inter-bank market on June 28, 2017, injected a total sum of $195 million to the wholesale, SMEs and invisibles segments of the market.

The apex bank has been intervening in the official market in the last few months in an attempt to narrow the spread between rates on the official market and black market. It has sold more than $5 billion since February.