The naira was relatively stable at the interbank segment of the forex market Thursday  due to moderate supply of the greenback.

THISDAY learnt that the local currency closed yesterday at N157.50 to a dollar, the same value it stood at the end of the previous day’s trading.
A source informed THISDAY that the demand for the greenback at the interbank was not huge.

Emerging Markets Strategist, Standard Bank Plc, Samir Gadio, in a note, argued that even though the market had witnessed an increase in the end of the month forex sales by multinational oil firms, the nominal value of the local currency has not changed drastically.

“The sales used to take place at the end of the month before. What has happened is that demand for dollar fell sharply in recent weeks, as sentiment improved, thanks to offshore in flow into treasury bills,” Gadio added.

The local currency had gained 30 kobo to close at N157.50 to a dollar at the interbank on Wednesday. The Nigeria National Petroleum Corporation ( NNPC) had sold about $350 million to some bank at the interbank and that had provided support for the local currency.

At the regulated Wholesale Dutch Auction System (WDAS) on Wednesday, the Central Bank of Nigeria (CBN) had sold $150 million at N156.01 to a dollar.

Meanwhile, the value of Commercial Paper (CP) held by Deposit Money Banks (DMBs) at end-November last year, fell by 5.3 per cent to N200.5 billion, in contrast to the increase of 1.2 per cent at end- October 2011.

According to a CBN monthly economic report, the CP constituted 3.7 per cent of the total value of money market assets outstanding at end-November 2011, compared with 4 per cent at the end of the preceding month.

Similarly, the report showed that Bankers’ Acceptances (BAs) declined by 17.7 per cent to N85.60 billion, in contrast to 19.5 per cent increase in the preceding month.

“The development in BAs reflected the fall in investments by deposit money banks and discount houses. As a proportion of total value of money market assets outstanding, BAs accounted for 1.6 per cent, compared with 1.97 percent at the end of the preceding month,” it added.

Source: Thisday/Obinna Chima