Currency Watch

Naira unchanged as CBN, BDCs discuss N185 exchange rate spread 


January 11, 2017 | 8:26 am
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… as CBN auctions N195.6bn Treasury Bills

The naira on Tuesday closed stable against the US dollar across segments of foreign exchange market, amid concern for huge exchange rate spread between the official and parallel market, according to findings.
After trading on Tuesday, naira closed at N305 against the dollar, the same as two weeks ago at the interbank spot market. It closed at N490 and N400 per dollar at the Bureau De Change (BDC) segment and parallel market, respectively.
The Central Bank of Nigeria (CBN) and the Association of Bureau De Change Operators of Nigeria (ABCON) are in discussion on how to reduce the exchange rate margin between the official and parallel market rates, which is put at N185.
Aminu Gwadabe, acting president of ABCON, said the move would boost liquidity and attract foreign investors into the country.
The naira lost a third of its official value against the dollar in 2016, after the bank scrapped a peg in a bid to alleviate dollar shortages. On the black market, the naira is worth about 40 percent less than the official rate, Reuters report.
Finance minister, Kemi Adeosun, said last month that the central bank would try to narrow the gap, which the government said was hurting an already shaky economy, but gave no details.
Nigeria plans to sell N195.96 billion ($644.08m) in short-dated treasury bills at an auction on January 19, the central bank said on Tuesday.
The bank said it would sell N36.78 billion in three-month debt, N39.17 billion in six-month bills and N120 billion in one-year notes, using a Dutch auction system. Payment will be due the day after the auction.
Nigeria issues treasury bills to fund its budget deficit, manage banking system liquidity and curb rising inflation.
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January 11, 2017 | 8:26 am
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