Despite no foreign exchange sales at the Retail Dutch Auction System (RDAS) by the Central Bank of Nigeria (CBN), the nation’s currency, the naira, yesterday firmed up against the dollar, gaining N1.18k at the inter-bank 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 inter-bank market as well as inflow from holiday makers and Diaspora Nigerians which hit the market later than expected.
“Demand for forex at the inter-bank market was low. Few institutions that still have dollar are more disposed to selling at the inter-bank market. It is not as if there is any major inflow from oil companies”, a financial market dealer told BusinessDay.
At the foreign exchange (FX) market, naira 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.
Inter-bank 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 Inter-Bank Offered Rates (NIBOR) call tenor dropped from 10.62 percent on December 31, 2013 to 10.58 percent yesterday. Similarly, 7 days, 30 days, and 60 days tenors went down to 10.83 percent, 11.08 percent, and 11.33 percent yesterday to 10.87 percent, 11.12 percent, and 11.37 percent, respectively, on December 31, 2013.
Analysts at Cowry Asset Management had anticipated that interest rates would this week decline amid boost in system liquidity, following maturing Treasury bills and Asset Management Corporation of Nigeria (AMCON) bonds.
