Naira Stable as Financial Markets Close for Eid-el-Fitri

The naira remained stable as financial markets, including the foreign exchange market are on a two-day break to celeberate the Eid-el-Fitri.
Analysts also attributed the stability in the foreign exchange market to the rise in external reserves.
External reserves rose to $38.94 billion as at July 24, 2014, representing 0.2 percent increase compared to $38.87 billion the previous day, according to the data ob¬tained from the website of the Central Bank of Nigeria (CBN).
Meanwhile, all markets including money market, for¬eign exchange market, capi¬tal market and OTC would be stalled for two days as a result of the holidays to celebrate the Eid-el-Fitri.
The CBN last week sold a total of USD671.92 million (or N104.64 billion) to end users at the biweekly Retail Dutch Auction (RDAS) as against USD596.58 million (or N92.87 billion) in the preced¬ing week. Consequently, the official USD/naira rate stead¬ied at N155.73/$1. The USD/naira exchange rate also held steady at N167.00/$1 at the bureau de change. However, at the interbank market, the local currency depreciated slightly by 0.01% (or N0.01) to N162.05/$1 despite sales of USD11.5 million by the lo¬cal unit of Italian oil and gas multinational, ENI, to dealing commercial banks. The local currency also depreciated at the parallel markets by 0.90% (or N1.50) to N168.50/$1.
Also this week, inter-bank rates are expected to rise on the back of pressure from commercial banks’ participation in foreign ex¬change auctions.
In line with analysts’ ex¬pectations, Nigerian Inter-Bank Offered Rates (NIBOR) last week decreased across all placement tenors, as the full impact of earlier dis¬bursed FAAC inflows worth N755.95 billion was evident. This was in addition to open market operation (OMO) inflows of N179.42 billion which outweighed outflows of N134.89 billion. Primary market treasury bills auctions and maturities each consisted of 91-day bills worth N34.89 billion; 182-day bills worth N48 billion; and 364-day bills worth N52 billion, while an additional N39.53 in 114-day bills and N5 billion in 115-day bills matured via open market operations.

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