Loans from the Central Bank of Nigeria (CBN) to banks dropped by 6.7 per cent to N1.8 trillion last week.
LEADERSHIP can authoritatively reveal that lending to banks through the CBN’s Standing Lending Facility (SLF) dropped from N1.9 trillion the previous week to N1.8 trillion at the close of business last week Friday.
This implies that few banks last week depended on the apex bank loans to meet their cash obligations, following the illiquidity in the banking system.
However, the money market rate has crashed in the past two consecutive weeks, coming from as high as 66.83 per cent to 4.75 per cent on the heels of CBN weekly intervention.
Compared to last week, the overnight rate declined by 24.92 per cent week-on-week, broadly validated by an improvement in system liquidity, which moved from a deficit of N207.19 million, to a positive balance of N153.62 million.
Experts at Cordros capital, a Lagos based research firm, attributed last week’s movement in the overnight rate to a deluge of inflows, in particular to a bond maturity totaling N480.13 billion and cash injections from monthly budgetary allocation worth N407.81 billion.
“The overnight rate was less sensitive to the debits for foreign exchange sales totaling $803.43 million and a net Open Market Operation (OMO) outflow of N178.96 billion”, they explained.
On foreign exchange, they noted that CBN sold approximately $803.43 million at the interbank window, through spot $3.14 million delivery and $429.09 million forward contracts, $246.20 million Small Medium Enterprises and Invisibles channel, $100 million authorized dealers, and the $25 million Investors & exporter’s market.
On this week’s outlook, they said, “While we look for continued stability of the NGN at the interbank market, we expect further interventions to temper the naira weakness parallel segment next week.
“We expect demand to remain healthy in the coming week, as the impact of improved system liquidity lingers, coupled with additional inflow of N62.98 from maturing OMO bill. Meanwhile, at next week’s NTB auction, the apex bank will offer N150.61 billion across the 91-day (N45.18 billion), 182-day (N23.43 billion), and 364-day (N82.00 billion) bills.
“We look to a northward movement in rates in the coming week, owing to one, debit for foreign exchange sales and two, further OMO auctions to mop up both existing liquidity and the maturing N62.98 billion worth of OMO bills”.
CBN To Inject More Funds Into Inter-bank Market
Meanwhile, as the inter-bank forex market resumes after the Workers’ Day holiday, there are strong indications that the Naira is set to appreciate this week as the Central Bank of Nigeria (CBN) commences another round of forex injections into the invisible segment of the market.
Industry experts are of the view that the rate of forex liquidity being pumped into the system by the CBN will lead to a depreciation of the dollar against the naira.
The CBN acting director of Corporate Communications, Isaac Okorafor, in a chat with business correspondents at the weekend confirmed moves by the apex bank to inject more foreign exchange into the inter-bank segment of the market.
He said it was in line with the commitment of the CBN governor, Godwin Emefiele, to ensure that those who had legitimate need for foreign exchange were guaranteed access to it.
While stressing that the actions of the bank were in sync with its mandate of safeguarding the value of the local tender, Okorafor said the CBN remained determined to achieve a convergence of the rates in the interbank and Bureau de Change segments.
With the latest policies of the CBN, which cater specifically for SMEs, exporters and importers, market analysts are of the strong view that the Naira will firm up against other major currencies when trading commences this week.
Speaking at the weekend, frontline entrepreneur, Tony Elumelu also disclosed that global investors were excited about the forex policies of the CBN which, he stressed, had brought predictability to the forex market.
‘Investigative, Digital Story-telling, Proper Response For Current Challenges’
Chairman of Daily Trust Foundation, Malam Wada Maida has said, has suggested that investigative reportage and digital story-telling are some...
4 Cheat Death, 7 Cows Killed In Ekiti Auto Crash
No fewer than four passengers on Monday escaped death by the whiskers as a commercial bus rammed into herds of...
Court Jails Insurance Graduate For Impersonation
A graduate of Insurance from the Polytechnic, Ibadan, Oyaremi Olalekan Olabode, was on Monday convicted of criminal impersonation and sentenced...
OAU Will Exit National Grid By October, Says VC
Vice Chancellor of Obafemi Awolowo University, Ile-Ife, Prof. Eyiyope Ogunbodede on Monday disclosed that the institution has embarked on power...
Edo Assembly Clears Six Commissioner-Nominees
The Edo State House of Assembly (EDHA) has cleared six commissioner-nominees whose names were recently sent to the House by...
Gov. Mohammed Of Bauchi Appoints New HOS
Gov. Bala Mohammed of Bauchi State has approved the appointment of Alhaji Nasiru Yalwa as the state’s new Head of...
Insecurity: Omo-Agege Backs Call For Deployment Of Soldiers On Highways
Deputy Senate President, Ovie Omo-Agege has thrown his weight behind the move to deploy soldiers on the highway to curb...
COVER STORIES22 hours ago
FG, Ethiopian Airlines, Others Plan New National Carrier
COVER STORIES22 hours ago
FG Probes PEF, Freezes 2 Managers’ N3bn Account
POLITICS18 hours ago
South East Leaders Chide Kalu For Supporting Ruga
COVER STORIES21 hours ago
No Annual Vacation For Appeal Court Judges
NEWS23 hours ago
Muslims Worship At ECWA To Promote Religious Harmony
COVER STORIES12 hours ago
Again, Obasanjo Writes PMB
BUSINESS22 hours ago
UK Parliament Holds Session On Bayelsa Oil Spills
FEATURES18 hours ago
As Yahaya, Dankwambo Lock Horns Over Gombe Assets