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Naira’s slide forces unscheduled treasury bill auction on CBN

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THE latest continuous slide of naira has pressured Central Bank of Nigeria (CBN) to an emergency sale of about N114.6 billion (or $375 million) worth of treasury bills yesterday.

Describing the move as a firefighter strategy by CBN to boost dollar liquidity in Nigeria money market, after naira’s latest fall, experts fear it may portend worse financial auguries in near future.

The bank offered to sell 100 billion naira of bills in maturities of three, six and 12 months but got bids of 454.9 billion naira, with the one-year paper winning around 80percent of demand.

Pressure has been building on naira as oil prices drop and foreign investors made brisk profits on local bonds against falling yields.

But yesterday sale of most-liquid one-year bill at 12percent was lower than the 12.25 percent  it paid at its last auction in July which was comparable with as high as 18 percent it fetched a year ago.

Foreign exchange trading was equally thin with naira quoted at N363.50 per dollar compared with N362.50 it traded at weekend as foreign investors repatriated funds.

Nigeria operates multiple exchange rate regime to ease pressure on naira in which N306.90 is official rate with the figure always inflating at the bureau de change (BDC) or parallel market windows.

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