The naira closed at 365 per United States dollar on Friday, up from 367/dollar as dollar supply continued to improve. The local currency
has been trading between 367 and 369/dollar in recent weeks. Analysts said the local unit would continue to trade between 360/dollar and 370/dollar in coming months. They, however, said that the Central Bank of Nigeria’s policies on naira would determine the ultimate fate of the currency.
The CBN is seeking to achieve exchange rate convergence as it continues to step up its weekly interventions in the foreign exchange market. Meanwhile, the Federal Government is planning to sell N130.37bn worth of treasury bills at an auction on October 4.
The CBN will offer N28.69bn in three-month paper, N33.49bn in six-month bill and N68.18bn in one-year note. Results of the auction will be announced on the same day. The CBN issues treasury bills twice a month to help the government to finance its budget deficit, curb money supply growth and provide an avenue for lenders to manage liquidity.
The Federal Government had raised N243.7bn at a bond auction last Wednesday, almost double the amount it offered, as local funds and foreign investors piled into longer tenors to lock in yields. The Debt Management Office put N135bn worth of bonds maturing in 2021, 2027 and 2037, on offer. However, total investor demand stood at N394.8bn, prompting the debt office to increase the size of the offer, Reuters reported.
