Naira Appreciates On Dollar Inflow From Oil Companies And CBN

The naira improved against the United States dollar at both the Wholesale Dutch Auction System (WDAS) and the interbank segments of the forex market yesterday on dollar inflow from multinational oil companies and the Central Bank of Nigeria (CBN).

Data from the apex bank showed that at the official market, the local currency jumped by 10 kobo to close at N155.80 to a dollar yesterday, compared with the N155.90 to a dollar it attained previous Wednesday.

The apex bank offered a total of $150 million to the market yesterday. It had offered same amount at the auction held previous Wednesday.

 

The WDAS did not hold on Monday due to the public holiday to commemorate the Easter celebration. On the other hand, data from the Financial Market Dealers Association (FMDA) showed that the naira advanced by 9 kobo at the interbank market to close at N157.41 to a dollar Wednesday, as against the N157.50 to a dollar it closed the previous day.

Dealers said that inflow of the greenback from Chevron, Total and Addax also supported the local currency. Specifically, they said that while Chevron supplied a total of $70 million to the market, Total sold $6 million and Addax sold $10 million.

Analysts also said the performance of the naira was also buoyed by inflow of forex from offshore investors into the now attractive, Nigerian treasury bills market. While the naira closed at N159 to a dollar at the Bureau de Change (BDC) segment yesterday, it stood at N160 to a dollar at the parallel market.

The CBN said on Tuesday that its primary objective in 2012/2012 monetary and credit policy measures for 2012/2013 would be the maintenance of price stability in compliance with the CBN Act, 2007. It also said that would within the said period; it endeavours to achieve the overall inflation objective of government, through effective liquidity management; with a view to creating an environment conducive for sustainable growth.

“The CBN shall also continue to take all necessary steps to ensure banking soundness and financial sector stability as well as enhance the efficiency of the payments system. The bank shall sustain the effective enforcement of financial market rules to promote the evolution of credible financial markets,” the regulator said.

The CBN also insisted that it would continue to use the Open Market Operations (OMO) as the major channel of monetary operations in the secondary market.

“OMO operations shall involve the use of direct auctions and two-way quote trading, which shall be on the basis of need. Intervention securities of appropriate tenor shall continue to be used in liquidity management while authorised dealers in instruments (appointed deposit money banks and discount houses) shall be maintained as intermediaries in the money market,” it added.

It also advised all BDCs operation to continue to render monthly returns through the e-FASS, on their assets and liabilities, and daily returns on the utilisation of forex.