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Nigeria’s naira falls on official, parallel markets as CBN sells N327.4 bln TBills

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By Samuel Bankole 

Nigeria’s local currency weakened on both the official and parallel market on Thursday as the country continue to experience dollar shortage despite higher oil prices in the international market.

The naira depreciated by 0.04 per cent to N425.05 to the greenback on the Investors and Exporters (I&E) foreign exchange window compared with N424.88 it traded the previous day.

Traders said most participants in the market maintained bids between N410.00 and N444.00 per dollar.

On the parallel market, the local currency was selling for N610 to the dollar while currency traders on the street and bureau de change were buying at N590 to the dollar from sellers.

The country’s currency has consistently been under pressure in recent times as the Central Bank of Nigeria (CBN) ratio dollar on the official window to endusers.

Nigeria has not benefited from the rising crude oil prices in the international market due to shortfalls in production due to rampant thieft in Niger Delta.

READ ALSO: NNPC fails to remit earnings to FAAC due to huge spending on fuel subsidy

Nigeria faces double-digit inflation and low growth, amid a shrinking labour market and mounting insecurity.

Finance Minister Zainab Ahmed said last month that the country was barely able to cover the cost of imported petrol from its oil and gas revenue.

On the money market, the interbank lending rate has continued to maintain the same rate as liquidity in the market remains flat.

The Overnight (O/N) rate remained unchanged at 14.00 per cent, while the Open Repo (OPR) decreased by 0.17 per cent to close at 13.83 per cent against the last close of 14.00 per cent.

Meanwhile, the CBN held its scheduled Primary Market Auction (PMA), selling Treasury Bills worth N327.40 billion across the 91-day (N12.28 billion), 182-day (N17.16 billion), and 364-day (N297.96 billion) tenors.

The stop rate for 91-day tenor settled lower at 2.40 per cent (-9 bps). However, the stop rates for 182-day and 364-day tenor remained unchanged at 3.79 per cent and 6.07 per cent, respectively.

The auction was oversubscribed by 89 per cent, with bid-to-cover ratios settling at 0.95x (91-day), 8.02x (182-day), and 1.89x (364-day).

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