Naira gains as FG set to repay N198.03bn worth T- bills
The Naira, on Tuesday gained further at both the official foreign exchange market and the Investors & Exporters FX (I&E) window, while the Federal Government of Nigeria has concluded all plans to repay total sum of N198.03 billion or $647million worth of treasury bills maturing in December.
As at close of yesterday trading activities, the local currency stood at 306.30 to the US Dollar compared to 306.35 traded on Monday and 306.40 exchanged on Friday at the interbank official forex market.
Also, at the (I&E) FX window, the Naira, which had closed at 360.50 per dollar on Monday rebounded the following day to close at an appreciable rate of 360.37, represented a growth of 0.4 per cent, even though it opened at a declined rate of 3559.75, weaker than 359.69 recorded the previous day.
Although, the Investors FX window recorded a significant drop of $112.28 million in the daily transactions turnover, when compared to traded figure of $96.77 on Tuesday against Monday’s exchanged figure of $209.05.
At the parallel market, for the second day running this week, the local currency remained unchanged at 363 to the Greenback, and also, steadied at the depreciated rate of 483 to the pound sterling and 427 per Euro, respectively.
Meanwhile, the Debt Management Office (DMO) has explained on Tuesday that the bills due on December 14 and December 21 would be redeemed rather than rolled over as before, freeing up space in the bond market for corporates as the government tries to rebalance its debt mix.
It is worthy of note that the Central Bank of Nigeria (CBN) has kept liquidity tight in the country to support the local currency, as well attracting foreign inflows into the nation’s bond market, in order to boost forex liquidity in the wake of a currency crisis in the country.
Yields on treasury bills, however, dropped by more than half to around 7 per cent across board following the announcement, traders said.
With the repayment, this implies that the DMO will not hold an auction of treasury bills this month, as the next auction stated to holds the first week in 2018.
According to DMO, “The redemption over time will help reduce the refinancing risk associated with short-term borrowings through treasury bills.”
The DMO has said it was wanted to raise Eurobonds or syndicated loans for $3 billion to redeem part of a local treasury bill holding worthN 2.7trn ($8.8 bln).
Nigeria sold $3bnworth of Eurobonds last month, out of which $2.5bn is to part-finance 2017 Budget deficit and the balance for the refinancing its domestic debt.
Stories by Motolani Oseni
