. Relapses at I&E FX window
The Naira, at the close of trading activities on Wednesday remained steadied at the official foreign exchange spot market and the parallel segment, checks by The Daily Times has revealed.
This is even as the local currency began yesterday trading low at N360.09 compared to N360.01 at the Investors and Exporters (I&E) FX window, however, traded high at N361.30 before closing at a relapsed rate of N360.40, lower than N360.25 settled on the previous day.
But the special foreign exchange window, declared an improved transactions turnover of $19523 million against $164.83 traded on Tuesday, the same volume exchanged on Monday.
The Naira, at the official forex spot market, closed at N306.00 per US Dollar, the same figure it has been trading since the beginning of this week. But lower than N305.90 traded a week ago.
At the parallel market, the naira remained unchanged at N362, as well but dropped to N502 to the Pound compared to N500 sold over the weekend, as well settled at N445 against N442 to the Euro.
Earlier in the week, the Central Bank of Nigeria (CBN) lifted the foreign exchange market with $210 million, to meet customers’ requests in various segments of the forex market.
The apex bank, explained that it offered $100m to authorized dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment got the sum of $55m.
According to figures obtained from the Bank, Customers in need of foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated the sum of $55m.
The Bank’s Acting Director, Corporate Communications Department (CCD), Mr. Isaac Okorafor, reiterated the Bank’s commitment to continuous to intervention in the interbank foreign exchange market, in line with its pledge to sustain liquidity in the market and maintain stability.
Okorafor said that the CBN would continue to strategically manage the forex with a view to reducing the country’s import bills and halting depletion of its foreign reserves.
It will be recalled that last Monday, February 12, 2018, the CBN had intervened to the tune of $210m to cater for requests in the various segments of the forex market.
Also, the nation’s short-term Treasury bill yields fell 50 basis points on Tuesday on expectations the government will sell less debt at auction in the second quarter after raising $2.5 billion from a Eurobond.
The government has been working to lower its borrowing costs, particularly as inflation fell for the 12th time in a row in January. It sold Eurobonds last Thursday to pay off the bills rather than rolling over debt as it has done in the past.
Nigeria has been switching into dollar debt to lower costs. It intends to book more loans offshore before 2019 to increase it foreign loans to 40 percent of total debt from 27 percent now.
The West African nation plans to source $2.8bn abroad to help finance its 2018 budget, which is still under consideration with lawmakers.
Finance Minister Kemi Adeosun said this month that the country will redeem 762.5bn naira ($2.5bn) worth of treasury bills to reduce the government’s costs.
Traders said the short-dated bill with 60 days to maturity, traded at 14.3 percent on Tuesday, down from 14.8 percent in the previous session.
Investors are waiting for the debt office to announce which bills it intends to pay off and a reduction in auction volumes for second quarter, which could spur buying, traders said.
The central bank, however, has been mopping up liquidity through open market bills to keep rates above inflation.
The medium-term bills with 150-days to maturity, traded at 14.7 per cent on Tuesday, down from 14.9 per cent previously. The longer-dated notes were unchanged at 13.45 percent, traders said.
Stories by Motolani Oseni