Naira stabilises as overnight rate falls on liquidity injection
.I&E FX window gains, record $908m value in one week
The Nigerian currency, Naira, over the weekend, remained stabled at 363 to the US Dollar at the parallel segment of the foreign exchange, and 305.95 at the official forex market, while the overnight lending rate fell to 9 per cent in late trades on Friday from around 21 per cent in the previous session after the Central Bank of Nigeria (CBN) repaid maturing treasury bills to boost liquidity on the money market.
This is even as the Investors & Exporters Foreign Exchange (I&E FX) window, gained at an opening trading rate of 360.00 per US Dollar against 360.15, represented just 0.01 per cent, but slightly closed at a better rate of 360.40 per dollar over 360.55 traded the previous day, indicated 0.04 per cent.
At the close of the official forex market for the week on Fiday, the I&E FX window, had declared total traded value of $908 million, against $655.06m traded a week ago, which was a total gain of $252.95.
The local currency, also, stood steadied against the Pound Sterling and the Euro at 473 and 420, respectively at the parallel market.
In the other hand, the apex bank has kept rates high in the country in order to continue to fight inflation and currency weakness, while attracting foreign investors with incessant selling of treasury securities, so as to soak up naira liquidity in the system.
However, the overnight lending rates hit 120 per cent two weeks ago after a court ordered a freeze on millions of bank accounts with incomplete identity documents, and the bank sold treasury bills.
Traders said money market rates trended downwards after the monetary authority on Thursday, repaid around 200 billion naira worth of open market bills that matured.
Although, they believed that as long as the CBN continues to intervene and maintain tight money market liquidity to lure foreign inflows to support the currency that the Naira would sustain its gaining momentum across the forex market.
Stories Motolani Oseni
