Inter-bank rates drop as FAAC disburses N207bn



By Gbenga Agbana  Monday, 21 Jun 2010         


Liquidity from the release of about N207bn from the Federation Account Allocation Committee last week, which hit the economic system crashed rates at the inter-bank market.




At the close of trading last week, the data available showed that the seven-day Nigerian Inter-bank Offer Rate closed the week at 2.5 per cent, indicating a 446 basis points decrease from the previous week‘s figure of 6.96 per cent, while the 90-day NIBOR closed the week at 6.79 per cent, showing a 167 basis points decrease from the previous week‘s figure of 9.46 per cent.According to the report of FSDH Securities Limited, at the 91-day treasury bill auction, a total of N18.70bn worth of securities were offered and sold and the bill was 129.60 per cent subscribed, N24.23bn bid was issued, at a discount of 2.5 per cent.


At the 182-day Treasury Bill auction, securities worth N40bn were offered and sold and it was 158.13 per cent subscribed, as N63bn worth of bid was received and the bills were offered at a discount rate of 3.51 per cent.In that segment of the market, N30bn worth of matured bills were repaid into the system, resulting in a net outflow of N10bn from that segment.


Meanwhile, the Central Bank of Nigeria continued to mop up the naira from the market last week through the Open Market Operations, as N28.70bn was withdrawn from circulation, which culminated in an outflow of N44.70bn from the primary market and secondary segments of the securities market.


At the foreign exchange auction held last week, the CBN offered $700m, compared to $600m the previous week, while $657.18m was sold, which was the same as the amount demanded, representing a 93.88 per cent of the amount offered.The value of the naira appreciated at the official market, but depreciated at the inter-bank market and remained stable at the parallel market.


At the official market segment, the value of the naira appreciated by 18kobo, to close at N148.89 to a dollar, while it depreciated by 37kobo at the inter-bank segment, to close at N151.60 to a dollar. The naira was stable at the parallel market at N153.50 to a dollar.





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