Categories: Finance

Naira Records Slight Gain, Closes at 393/Dollar

The naira recorded marginal gain at the parallel market on Monday and closed at 393 against the United States dollar, up from 397 on Friday.

The local currency, which had fallen to 400/dollar last Friday, traded lower last week.

The naira closed at N505 and N435 against pound sterling and euro respectively at the parallel market on Monday, the News Agency of Nigeria reported.

At the Bureau De Change segment of the foreign exchange market, the naira closed at N385, N505 and N420 against the dollar, pound sterling and euro, respectively.

The naira appreciated at the official interbank market to close at N317.34, from N320.25 posted on Friday.

Traders at the market said that the demand for the greenback was still on the high side.

NAN reported that the market was eagerly awaiting the sale of forex by banks to the BDCs during the week.

Meanwhile, the interbank overnight lending rate had jumped to 23 per cent on Friday from 10 per cent recorded in the previous week.

This came after the Central Bank of Nigeria sold Treasury bills at higher yields to lure foreign investors.

The CBN has been offering Treasury bills at high rates to attract offshore flows into the country.

The country has been hit by the fall in oil prices, a development that has prompted foreign players to flee bond and equities markets.

The CBN has been selling hard currency almost on daily basis.

The country is in the middle of its worst crisis in decades as a slump in oil revenues hammers public finances, causing chronic dollar shortages and triggering a contraction in the economy.

The CBN Governor, Mr. Godwin Emefiele, has said a recession is likely.

The regulator raised N256bn in six-month bill on Friday, N206bn more than it had planned to issue, and at a higher yield of 18 per cent to soak up naira liquidity and attract foreign investors back to the country.

It also intervened on the currency markets after the naira hit an all-time low of N353.75 on the interbank market on Friday.

The Federal Government is planning to raise N110bn in local currency denominated bonds on August 17. It is also seeking advisers and book runners to manage a planned $1bn Eurobond it intends to offer this year.

Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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