Forex

PBOC Refrains From Adding Cash, Says Enough Liquidity Already

Published

7 years ago

February 7, 2017

PBOC Refrains From Adding Cash, Says Enough Liquidity Already

China’s central bank refrained from offering reverse-repurchase agreements for the third day in a row, which resulted in a net withdrawal of funds from the financial system.

The People’s Bank of China didn’t carry out the open-market operation because it aims to keep liquidity basically stable, and current levels are relatively high, according to a statement posted on its website. The monetary authority gauged demand for seven-, 14- and 28-day reverse repurchase contracts for the Feb. 8-14 period, according to traders at primary dealers who bid at the auctions. A total of 120 billion yuan ($17.5 billion) of contracts mature on Tuesday.

Chinese policy makers have moved to mopping up record cash injected before the Lunar New Year holidays. The PBOC has refrained from conducting open-market operations for the past three trading days, after raising the cost of such funds on Friday when trading resumed after the break. The central bank has since August strengthened its hold on money-market rates and guided financing costs higher to discourage excessive leverage.

“With cash returning to the banking system, the PBOC naturally doesn’t need to provide additional liquidity through reverse repos,” said Shen Bifan, an analyst at fixed-income department at First Capital Securities Co. in Shenzhen. “Moreover, the big picture now is deleverage, so the central bank will continue its efforts to guide short-term rates higher, and we can’t rule out the possibility of further hikes in the reverse repo rates.”

The yield on sovereign bonds due 2026 fell two basis points to 3.48 percent, data compiled by Bloomberg show. That on the benchmark 10-year securities jumped eight basis points on Monday to 3.49 percent, the highest since 2015, amid talk that the PBOC had gauged demand for repurchase agreements that drain funds from the financial system, according to a research note from Guosen Securities Co. on Tuesday.

“It’s not good timing to resume repo operations,” analysts led by Dong Dezhi at Guosen wrote in the note. There is still a shortage of money in the financial system due to falling yuan positions, so reverse repos are needed to supplement supply, according to the analysts.

Some 1.85 trillion yuan of reverse repos and Medium-term Lending Facility loans are set to mature by Feb. 22, and an additional estimated 630 billion yuan offered through the “Temporary Liquidity Facility” will come due, analysts led by Ming Ming at Citic Securities Co. wrote in a note. The impact on liquidity shouldn’t be overlooked, they said.

The benchmark seven-day repo rate, a gauge of interbank funding availability, fell three basis points to 2.42 percent as of 12:04 p.m. in Shanghai, weighted average prices show.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Naira

Dollar to Naira Black Market Today, April 19th, 2024

As of April 19th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,100 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

5 hours ago

April 19, 2024

Samed Olukoya

As of April 19th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,100 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,020 and sell it at N1,010 on Thursday, April 18th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined slightly when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,100
Selling Rate: N1,090

Naira

Naira’s Recent Gain Reflects Policy Direction, Says CBN Chief Olayemi Cardoso

Published

1 day ago

April 18, 2024

Samed Olukoya

Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has explained that the recent surge in the Naira is a testament to the positive direction of government policies rather than active intervention to defend the currency’s value.

Addressing attendees at the spring meetings of the International Monetary Fund and World Bank in Washington, Governor Cardoso underscored that the CBN’s intention is not to artificially prop up the Naira.

He clarified that the fluctuations observed in the country’s foreign exchange reserves were not aimed at defending the currency but rather aligning with broader economic goals.

Over the past month, the Naira has experienced a notable uptick in value against the dollar, signaling a reversal from previous declines. Data from Bloomberg reveals a 6.4% decrease in liquid reserves since March 18, coinciding with the Naira’s rebound.

Despite this decline, Cardoso pointed out that around $600 million had flowed into the reserves in the past two days, reflecting confidence in the Nigerian market.

Governor Cardoso articulated the CBN’s vision of a market-driven exchange rate system, emphasizing the importance of allowing market forces to determine exchange rates through willing buyers and sellers.

He expressed optimism about a future where the central bank’s intervention in the foreign exchange market would be minimal, except in extraordinary circumstances.

The recent resilience of the Naira follows a period of volatility earlier in the year, marked by a substantial devaluation in January. Since then, the CBN has implemented measures to stabilize the currency, including monetary tightening and initiatives to enhance dollar liquidity.

Cardoso highlighted the transformation in market sentiment, noting that investors now perceive Nigeria’s central bank as committed to stabilizing inflation and fostering economic stability.

As Nigeria continues its journey toward economic recovery and stability, Cardoso’s remarks provide insight into the central bank’s strategy and its impact on the country’s currency dynamics.

Naira

Dollar to Naira Black Market Today, April 18th, 2024

As of April 18th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,020 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

1 day ago

April 18, 2024

Samed Olukoya

As of April 18th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,020 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,050 and sell it at N1,040 on Wednesday, April 17th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate improved when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.