Lagos — The value of the naira remained stable yesterday following an inflow of over $1 billion into the foreign exchange market through the Nigeria Autonomous Foreign Exchange market (NAFEX) also known as the Investors and Exporters window as well as interventions of the Central Bank of Nigeria last week.
The naira which had weakened to N369 to the dollar last week sold at N368 yesterday while it firmed at the I&E window to N359.06 following an inflow of $131.84 million on Monday.
Over $1 billion had been injected into the market last week through the I&E window and CBN interventions. This is asides the dollars that the apex bank sells to bureau de change operators twice a week to aid liquidity in the market.
While the CBN had sold N250 million to small and medium enterprises as well as to customers requiring forex for business/personal travel allowances, school fees and medical bills, an inflow of $803.14 million was recorded at the I&E window.
The inflow at the I&E window was an improvement over the $705.1 million that was transacted through the market the previous week. This however, did not improve the value of the naira at the window as the value of the naira which started the week at N359.40 to the dollar was down to N360.36 at the I&E window last week Friday.
At the official market closed a bit stronger at N305.95 from N360, while at the parallel market the value of the naira which stared at N367 was down to N368 having weekened to N369 during the week.
At the FMDQ OTC Futures market, current total value of open contracts for the 12 instruments on the calendar stood at $2.6 billion as at Thursday, 14th September, with the soon to mature SEP 20 2017 being the most subscribed at a value of $383.30 million and contract price of N358.50 to the dollar. The least subscribed remains the MAY 30 2018 instrument, currently trading at N363.33 with total value of subscriptions at $42.3 million.
Meanwhile, interbank lending rates, which is the rate at which banks lend to each other and which measures the level of liquidity in the market remained stable despite the mop up by the central bank. Rates trended lower on Tuesday as open buy back and overnight rates closed at 20.0 and 20.8 per cents respectively even as the CBN floated OMO auctions throughout the week.
This week, OMO maturity of N140.9 billion is expected to hit the system but traders say they expect money market rates to remain at current levels as the apex bank continues with its frequent OMO mop ups.