- Naira strengthens against dollar
THE monetary policy intervention of the Central Bank of
Specifically, a total of N195.2 billion Treasury Bills matured within the week, but CBN simultaneously mopped it up with the issuances of another bill worth the same amount.
The issuances came in at 10 per cent, 10.2 per cent and 10.3 per cent for the 91-day, 182-day and 364-day respectively.
It however, softened the system with the N150 billion Open Market Operations' maturity at the end of the week, making the rates on securities to decline further, as the Call and Open Buy Back (OBB) declined by additional 50 basis points to close at 11 per cent and 10.75 per cent respectively.
The inter-bank money market had commenced the week with a much tighter level of liquidity, which was built on the previous week's low level of liquidity and Wednesday's foreign exchange auction at the Retail Dutch Auction System (rDAS).
The development nudged benchmark rates up, with the Call and OBB rates rising by 75 basis points, to close at 12.25 per cent and 12 per cent at the end of the first trading day.
The rates rates trended higher as trading on both securities peaked at 13 per cent, but both closed lower at 11.5 per cent and 11.25 per cent respectively due to clarity on the position of the Cash Reserve Requirement maintenance, which tuned out to be a credit figure.
Meanwhile, CBN offered the twice weekly dollar auction at the rDAS last week, totalling
At the Inter-bank market the Naira sustained a rising profile on the back of the dollar sales by oil majors and moderations by the CBN's weekly auction, appreciating by 44 kobo on the first trading day.
A further anticipation of more dollar sales on Tuesday bolstered the appreciation of the Naira till midweek, but was overturned, as it could not hit the system, causing a 68 kobo depreciation of the Naira on Wednesday.
"We anticipate the Naira will stabilize this week due to increasing oil prices and concurrent increase in demand for the Naira as foreign investors seek to participate in next week's bond auction," it said.
Finally, at the BDC, the Naira continued to witness pressure due to the recent CBN policy designed streamline operations of the BDC, as it also lost 50 kobo to close at N170.00/
CBN had last week, issued a new guideline for the computation of regulatory risk reserve by Nigerian banks, which was designed to raise the quality and loss absorbency of the banks' capital base.
The new policies outlined in the guidelines had
excluded regulatory capital when computing the Capital Adequacy Ratio, while collective impairment on loans and receivables and other financial assets will henceforth not form part of Tier-2 capital.
The securities firm projected that the new measure would create additional incentive for banks to bolster qualifying capital to sustain the CAR above the regulatory benchmark.
It also said the new policy is expected to create a strong buffer for external shocks in light of the banks' exposure to the Eurobond market, considering the prospects of volatility or depreciation in foreign exchange.
Globally, equity indices continued to sustain a broadly bearish trend last week, with the Russian RTS leading the decline by 3.1 per cent, followed by India BSE Sens, 0.6 per cent and
The bearish trend was attributed to the socio-political tensions spreading across the global economy, as counter sanctions by
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