The Naira held firmed against the United States dollar on Wednesday as Chevron Nigeria supplied the U.S. currency while offshore funds bought local debt.
The Naira was trading 0.34 per cent higher at N161.60 to the dollar at 1116 GMT, from Tuesday’s close of N162.15.
Chevron Nigeria, the local unit of U.S. oil firm, Chevron, sold about $18 million to banks, while offshore investors participating in a debt auction on Wednesday sold an undisclosed amount of dollars.
Offshore funds have renewed their appetite for Nigerian assets, dealers say, after the West African country rebased its GDP, overtaking South Africa as the continent’s biggest economy and making it a more attractive destination for investors.
Meanwhile, the Central Bank of Nigeria (CBN) auctioned N200 billion in treasury bills and bonds on Wednesday.
The interbank rate remained steady, but with slight volatility on Tuesday. Increased market liquidity partly driven by monthly statutory inflows, treasury bills repayments (Nigerian Treasury Bills and Open Market Operations), and a lower interbank funding requirement continued to stabilise the market.
The call/overnight and seven-day money market rates were: 10.9 per cent and 11.2 per cent respectively on Tuesday.
The interbank secured lending (Open Buy Back) was steady 10.25 per cent on Tuesday.
CBN’s commitment to stability of price and exchange rate was reinforced with the change to Cash Reserve Requirement (CRR) on private sector deposits from 12 per cent to 15 per cent. This was in addition to recent changes to CRR on public-sector deposit and several other monetary policy efforts to indirectly tighten money market liquidity and to support the naira.