The Naira shed weight at the official and interbank market yesterday following the easing of the Net Open Position (NOP) of banks by the Central Bank of Nigeria(CBN), closing N150.01 and N160.20 respectively.
The CBN had on Friday increased the NOP from one per cent to three per cent of? banks’ shareholders’ fund. Its reduction about a fortnight ago from 5 per cent almost shut down the interbank market, which made the apex bank to reverse its decision.
This increased the banks’ holding position, thus increasing the demand for forex. Net open position is the amount of dollars banks could hold relative to shareholders’ funds.
The currency however remained stable at the parallel market, closing at N162. The naira sold at the official window at N149.95 and N159.20 at the interbank at the close of last week.
Dealers said the inability of the CBN to meet demand put pressure on the naira, as the CBN supplied $350 million, short of the $421.25 million demanded yesterday.
CBN last week said it would begin to intervene at the interbank market by selling directly as well as at the official window, in a bid to stabilise the market and reduce undue pressure on the naira.
Dealers expect the regulator to step up supply in order to stabilise the market. Suleiman Ghali, a currency trader said though there was stability at the parallel market, the CBN should focus on the official window.
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