The CBN sold 205.9 billion naira worth of one-year bills on Friday at 13.5 percent, compared with the secondary market which is currently trading at 10.81 percent, in order to curb speculation.
The excess liquidity prompted the central bank to sell 205.9 billion naira ($1.03 billion) worth of one-year bills on Friday at 13.5 percent, compared with the secondary market rate of 10.81 percent, traders said. The bank had offered 78 billion naira in bills on Thursday.
It mopped up 205.9 billion naira ($1.03 billion) worth of one-year bills at a price yielding 15.6 percent, the same level as inflation, which was running above a six-year high as of May.
Secondary market bills were trading at 10.81 percent on Friday, traders said.
“Foreign investors will need to be convinced that the new FX regime is sustainable in the medium-term and will likely also require higher yields before resuming the purchase of local debt,” said Samir Gadio, head of Africa strategy at Standard Chartered Bank.
The central bank has said it would start a new foreign exchange trading regime on Monday, abandoning its 16-month peg and setting the stage for the naira to fall sharply. ($1 = 199 naira).
“The success of the new exchange rate regime will ultimately depend on how effective it is in attracting more foreign investment and getting pockets of dollars hoarded on the domestic front back into the market place,” said Cobus de Hart, economist at NKC Economists.
In the non-deliverable forward markets, the one-month contract, gained 3.45 percent to equal the record high of 300 naira per dollar hit the previous day.
No comments:
Post a Comment