The naira dropped further to 313.5
against the United States dollar at the parallel market on Tuesday as
shortage of foreign exchange, especially the greenback, persists in the forex markets.
The local currency had traded for 310 to a dollar on Monday.
On Tuesday, the naira closed at 199.40
to the dollar on the interbank market, according to Reuters, around the
peg rate of 197 to the dollar.
This came just as the interbank lending
rate rose to two per cent from one per cent on Monday, after the Central
Bank of Nigeria had directed commercial banks to fund their naira
accounts ahead of its intervention in the forex market on Thursday.
The overnight lending rates jumped by
100 basis points as the movement of naira cash for forex purchases
drained liquidity in the financial market.
The CBN intervenes once a week at the interbank forex market to provide dollar liquidity for some eligible importers.
The naira had plummeted against the
dollar last month after the CBN banned dollar sales to Bureau De Change
outlets and later stopped daily sales to the interbank market.
The measures were aimed at conserving the nation’s external reserves, which have hit an 11-year low at $28bn.
“The overnight rate went up today to
three per cent in the early trade but declined to two per cent after
some banks funded their forex accounts,” one dealer said.
The interbank rate mirrors the level of naira liquidity in the banking system.
Traders said commercial lenders’ credit
balance with the central bank opened at N978bn ($4.94bn) on Tuesday
before the bank called for the funding for forex purchases.
The central bank requires banks to fund their forex account 48 hours in advance of its intervention.
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