No Trading at Inter-Bank as Uncertain Atmosphere Prevail  

For the third consecutive time this week, the was no trading at the inter-bank market as traders are yet to come to grasp with the huge liquidity drain from the banking system.
Wale Abe, Chief Executive Officer of the Financial Market Dealers Association of Nigeria (FMDA) traders are unable to trade primarily, because there is no information, and when there is no information it will be impossible to take a position.
He said, as it were, there is so much uncertainty in the market and the dealers have adopted a watch and see attitude.
Abe said the traders are presently in shock and have apprehension what would happen next.
The interbank money market was halted for a second day on Wednesday after the central bank told commercial lenders to provide cash backing for foreign exchange purchases at its proposed intervention on Friday. But Abe said, there is nothing like trading was halted, rather, under the circumstances, traders advised themselves against trading as there is no information.
 Trading on the interbank market was also halted on Tuesday as banks complied with a directive to transfer government revenues into a single account with the central bank.
President Muhammadu Buhari had ordered that all revenues be paid into the Treasury Single Account (TSA) from Tuesday, as part of a drive to fight corruption and aid transparency
“The market is not trading yet,” one dealer said. “What we have is an indicative rate from some banks because of the instruction from the central bank to provide funding for forex intervention.”
“We only have people quoting about 50 percent as indicative rate for overnight placement,” another dealer said.
Nigeria’s central bank in August directed commercial banks to pay for their dollar purchases 48 hours in advance, in a bid to curb speculations at the forex market and drain liquidity from the banking system.
Dealers said there was minimal trading in the interbank money market at 20 percent for overnight lending on Tuesday, after the central bank released a market figure showing N486 billion in cash balances for commercial lenders.

Leave a Reply

Your email address will not be published. Required fields are marked *