Naira Strengthens Against Dollar As CBN Sells $299.9m

By Hope Moses-Ashike

The naira on Tuesday firmed up against the US dollar gaining 50 kobo at the Nigeria Interbank Foreign Exchange (NIFEX) market as it closed at N158.26/$ compared to N158.77/$, the previous day, data from Financial Markets Dealers Quotations (FMDQ) have indicated.

At the foreign exchange (FX) market, the naira strengthened against the dollar gaining N0.39k as it closed at N158.30/$ as against N158.69/$, the previous day.

Analysts are of the view that naira appreciation at both markets may be as a result of enhanced dollar supply from the Central Bank of Nigeria (CBN), as well as inflow from Diaspora Nigerians as they return for the festive celebration.

The CBN on Monday offered a total of $300 million but sold $299.9 million to 18 deposit money banks at the rate of N155.73/$ at its bi-weekly Retail Dutch Auction System (RDAS).

Analysts at Cowry Asset Management had presaged a moderation in demand at both the CBN RDAS and interbank markets as importers begin to wind down their businesses ahead of the Yuletide break.

However, naira yesterday remained stable at the parallel market closing at N172/$.

Interbank rates at the money market Tuesday reacted differently as the Nigerian Intebank Offered Rates (NIBOR) movement showed downward, stable and upward trend.

Consequently, call tenor climbed to 11.33 percent from 11.12 percent the previous day. 7 days and 30 days tenors remained stable at 11.38 and 11.95 percent respectively, while 60 days, 90 days, 180 days, and 365 days tenors dropped from 12.37, 12.66, 12.91 and 13.25 percents the previous day to 12.20, 12.50, 12.79, and 13.08 percents respectively.

Credit: Business day