The naira Monday closed stable against the dollar as the Central Bank of Nigeria (CBN) plans to raise N122.95 billion ($617.90m) in treasury bills with tenors ranging from three months to one year, tomorrow (November 4, 2015).
Consequently, the naira remained stable at the Bureau de Change (BDC) segment of the foreign exchange and the parallel market, closing at N225/$ and N226/$, respectively.
At the interbank foreign exchange market, the local currency gained N0.30k or 0.15 percent against the dollar. It closed at N197.22k/$ on Monday as against N197.52k/$ traded on Friday last week, data from FMDQ revealed.
Balami, Dahiru Hassan, member of the MPC, said at the last Monetary Policy Committee meeting that the foreign exchange market had been relatively stable, particularly in interbank rate, which had fluctuated between N196 -197. However, this is possible due to earlier policies of the CBN.
“The ability of the policy makers to stabilise the exchange rate at the official window for the past seven months is commendable and should be encouraged,” Hassan said.
Also speaking at the last MPC, Barau Suleiman, deputy governor, operations, CBN, explained that developments in the foreign exchange markets also suggest an underlying rising pressure.
The interbank rate has been fairly stable but the pressure was borne by the external reserves, which declined by 4.62 percent between July and August 2015. Furthermore, the premium between the interbank and the BDC rate remained perpetually elevated at about 24 percent, providing opportunities for arbitrage.
HOPE MOSES-ASHIKE
