Wednesday , November 22 2017

Buhari returns: Naira gains, trades at 455/dollar

The naira traded at 455 to a dollar amid liquidity boost in the Bureau De Change and parallel market segments of the forex market on Friday.

It was steady on both the official and black markets after President Muhammadu Buhari returned home from extended medical leave in Britain.

The naira appreciated against the pound sterling and euro as it traded at 545 and 470 to both currencies, respectively.

In other segments of the market, Deposit Money Banks and Travelex, an international money transfer services operator, sold the naira at 381 to a dollar.

The central bank has been intervening in the official market over the past two weeks to boost liquidity and support the currency.

But the country’s overnight lending rate dropped to around 12 per cent on Friday from 16 per cent a week earlier as maturing bills and government budget disbursements pumped more cash into the money markets.

Traders said the market opened on Friday with a cash balance of N9bn, against a deficit of about N2.3bn last week. The central bank repaid about N70bn in matured bills on Thursday to boost liquidity.

Meanwhile, the country’s foreign exchange reserves rose above $30bn as of March 8 to its highest level since October 2015, the CBN data showed on Friday.

Reuters reports that The country’s dollar reserves have increased by 15.02 per cent since the start of the year, data showed, but are still far off their peak of $64bn hit in August 2008.

The CBN did not provide any reason for the rise in the reserves, which coincides with a recent rise in crude prices.

As of mid-February this year, the nation’s external reserves rose by $4.7bn or 20 per cent in three months.

Statistics on the CBN website revealed that the foreign exchange reserves increased from $24bn on November 9, 2016 to $28.7bn on February 9, 2017.

The data also showed that within two months, the reserves increased by $3.8bn or 15.3 per cent from $24.9bn recorded on December 9, 2016 to $28.7bn on February 9, 2017.

The reserves increased by $2.9bn or 11.2 per cent since the beginning of this year till mid-February. Specifically, the external reserves rose from $25.8bn on December 30, 2016 to $8.7bn on February 9, 2017.

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