Naira appreciated by N1.05 at the official bi-weekly auction yesterday as the Central Bank of Nigeria (CBN) supplied all $200 million demanded at the official window, to close at N156.31. The currency however weakened against the dollar at the interbank market, shedding 10 kobo from the previous day’s value to close at N161.10. The naira remained stable at N162 at the parallel market.
Strong demands at the interbank were mitigated by huge supply by major oil firms as Exxon Mobil sold about $50 million and Royal Dutch Shell sold $100 million which brought stability to the market.
The outlook for the naira in the remaining weeks to the end of the year will depend on the demand level and how much the CBN is able to match on the supply side.
According to reports monitored by Reuters, “Officials of central bank actually called some banks and asked them to reduce their bid at the auction to a specific amount in order to reduce pressure on the naira.”
Meanwhile, the CBN plans to sell treasury bills worth N125.09 billion ($776.72 million) at its regular debt auction next week. This is part of the regulator’s liquidity mop up to control the amount of cash in the system.
The CBN will sell N30.09 billion in 91-day paper, N 45 billion in 182-day treasury bills and N50 billion in 364-day bills next Wednesday, using the Dutch auction system.
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