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Despite no foreign exchange sales at the Retail Dutch Auction System (RDAS) by the Central Bank of Nigeria (CBN) the nation’s currency, naira yesterday firmed up against the dollar, gaining N1.18k at the interbank market.
Naira yesterday closed at N158.6000/$ as against N159.7875/$ traded December 31, 2013, data from Financial Markets Dealers Quotation (FMDQ) have revealed.
Analysts attributed the appreciation in naira to low demand for the greenback at the interbank market as well as inflow from Oil majors, holiday makers and Diaspora Nigerians which hit the market later than expected.
“Demand for forex at the interbank market was low. Few institutions that still have dollar are more disposed to selling at the interbank market,” a financial market dealer told Businessday.
At the foreign exchange (FX) market, naira yesterday strengthened against the dollar gaining N1.20k to close at N158.84/$ compared to N160.04/$ traded on December 31, 2013.
While the official market remained closed since the festive period, naira remained stable at the parallel market closing at N173/4.
Interbank rates at the money market yesterday declined by 0.34 percent from 11.47 percent December 31, 2014 to 11.43 percent yesterday.
Consequently, the Nigeria Interbank Offered Rates (NIBOR) call tenor dropped from 10.62 on December 31, 2013 to 10.58 yesterday. Similarly, 7 days, 30 days, and 60 days tenors went down to 10.83, 11.08, and 11.33 percents yesterday to 10.87, 11.12, and 11.37 percents respectively on December 31, 2013.
Analysts at Cowry Asset Management had anticipated that interest rates would this week decline market amid boost in system liquidity, following maturing Treasury bills and Asset management Corporation of Nigeria (AMCON) bonds.
By: HOPE MOSES-ASHIKE
