Wednesday, 24 Nov 2010

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, on Wednesday, said that he expected the Nigerian naira to remain stable against the dollar in the short term.

Sanusi was quoted by Reuters in Abuja as saying, ”There will be foreign exchange stability in the near term. I expect the naira to remain steady against the US currency in the short term.”

Meanwhile, the CBN on Tuesday intervened in the foreign exchange market, offering $250m for sale at the foreign exchange auction.

The CBN in a statement posted on its website, said, ”Further to our circular, referenced, ”TED/FEM/FPC/01/110/09” of July 8, 2009, the CBN hereby intervenes with an offer of $250m for sale at the foreign exchange auction of November 22, 2010.”

The statement added that the authorised dealers were invited to submit their bid requests for the Wholesale Dutch Auction System through ”Reuters dealing 3000 xtra to the CBN Abuja.”

It added, ”The dealers are also reminded that their current accounts with the CBN must be adequately funded on the day of bidding and the accounts should remain funded at the time of disbursement, failing which the bids will be disqualified.”

The naira weakened on the inter-bank market on Monday, while the demand for dollar was more than supply.

The naira closed at N150.55 to the dollar on the inter-bank market, weaker than N150.40 per dollar the previous week.

Reuters quoted a dealer as saying, ”The market reacted to the result of the bi-weekly auction, which showed that demand was more than supply, and the fact that the naira also depreciated at the official window.

”The CBN held only one auction last week due to a public holiday, meaning that demand rose this week. However, we see the naira trending around N150-N150.50 to the dollar this week because of expected dollar inflows from energy majors month-end sales.”

The Nigerian inter-bank rates dropped to 8.08 per cent on the average last week, from 11.75 per cent recorded the previous week.

The inter-bank rates dipped as a result of the monthly allocation of about N223.72bn from the Federation Accounts Allocation Committee for the month of November that hit the system on Friday.

The seven-day Nigeria Inter-Bank Offered Rate closed the week at 9.17 per cent, a 475 basis point decrease from the previous week‘s figure of 13.92 per cent, while the 90-day NIBOR closed the week at 12.50 per cent, a 271 basis point decrease from the previous week‘s figure of 15.21 per cent.

Source: Punch