The nation’s currency, the naira, yesterday, lost N0.38k against the US dollar at the inter-bank market in spite of the intervention of the Central Bank of Nigeria (CBN) through foreign exchange auction worth $392.5 million.
The CBN offered a total of $400 million but sold a total of $392.5 million to 22 deposit money banks at the rate of N155.74/$ at its bi-weekly Retail Dutch Auction System (RDAS) window.
Consequently, the naira yesterday closed at N164.78/$ at the inter-bank market as against N164.40/$ traded the previous day, data from Financial Markets Dealers Quotations (FMDQ) have revealed.
The NGN has remained under pressure in recent weeks amid capital outflows and a persistent domestic positioning against the NGN. That said, the CBN has continued to provide USD liquidity directly to the banks, pursued regular Retail Dutch Auction System (RDAS) FX sales – and
Paul Orhii (m), director-general, NAFDAC, speaking during the visit of Vincent Ahonkai (r), global adviser, Bill and Melinda Foundation, to NAFDAC in Abuja on Wednesday. With them is Monica Eimujeze, director, registration and regulatory affairs, Bill and Melinda Foundation. NANeven resumed FX forward sales -, and as a result managed to cap the inter-bank exchange rate in the 164-165 area (164.3 on March 18), Samir Gadio, emerging markets strategist with Standard Bank, London, said.
Meanwhile, the external reserves continued to deplete as it has fallen to $38.3 billion as at March 18, 2014 from $38.4 billion on March 17, 2014.
According to Gadio, with FX reserves continuing to slide (30-d moving average at USD38.4 billion on March 17), concerns are rising over the sustainability of the CBN FX stance (which is now to contain the spread between the inter-bank and RDAS rates). In a heavily managed exchange rate, such a trend in FX reserves is often the prelude to a devaluation and sometimes a proper run on the currency if the public loses confidence in the FX regime.
Inter-bank rates at the money market declined further by 0.27 percent from 11.77 percent the previous day to 11.73 percent on Wednesday.
HOPE MOSES-ASHIKE
