In continuation of its effort to help the Federal Government raise money to fund this year budget deficit, the Central Bank of Nigeria (CBN)will Wednesday sell Treasury bills worth N212.85 billion just as the apex bank mopped up N71.6 billion on Friday through the Open Market Operation (OMO).
The apex bank said the Treasury bills on offer consist of papers maturing between 91 days and one year. Giving its breakdown, the bank said it would sell N45.85 billion worth of the 91-day bills, N62 billion of the 182-day paper and N105 billion of the one year debt.
On Friday, the CBN sold N71.6 billion in 195-day Open Market Operation (OMO) treasury bills at 18 per cent to reduce liquidity in the banking system in its bid to support the naira.
And due to the low liquidity and the withdrawal through OMO, the overnight Naira interbank lending rate closed around the 20 per cent level on Friday, a range it has traded all week.
However, traders said the interbank rates should trade at the 16 per cent level by next week once July’s FAAC allocations enter the banking system.
The local currency closed flat at 305 to the dollar on the official interbank market, but fell to a new record low of 412 to the dollar on the parallel market.
However, traders said that the expectation of the FAAC allocation to government agencies helped to calm the market.
“The market traded in anticipation of the release of the July budget allocations to states and local government, which hopefully should hit the system by Monday,” one dealer said.
Meanwhile, the Naira closed at an all-time low of 412 per dollar on the parallel market on Friday as a dollar shortage persists, traders said.
Traders said some bureaux de change operators have been finding it difficult to access their forex account and get dollar supply after the Central Bank suspended nine banks from the market, putting further pressure on the local currency.
On Thursday the naira closed at 409 per dollar on the parallel market. On the interbank market it traded at 315 compared with 305 the previous day
