The external reserves of the country, which have been downs for some time, received some strength as they rose by $595 million in five days to $26.196 billion on Monday. This represents an increase of 2.26 per cent, compared with $25.601 billion it was as of August 24, 2016.
According to Reuters’ reports monitored by Business247 News Online, the rise was attributed to the inflow of funds into the country’s fixed income market as there had been renewed interest by both foreign and local investors in the fixed income market given the attractive yields.
The $270 million transaction at N345 per dollar by Citibank Nigeria which bought 11-months treasury bills on behalf of offshore investors was partly responsible for the growth.
In addition to this, other transactions carried out at between N314.50 to N317.34 to the dollar even as the FX market registered $327 million worth of trades on Monday, about six times more than its usual volume, according to FMDQ OTC Securities Exchange.
Average trading was around $50 million a day on normal days, but might reach $100 million on days the Central Bank of Nigeria (CBN) intervenes in the currency market. Traders told Reuters that the CBN sold an undisclosed amount of dollars close to the end of market session, to help prop up the naira.
The CBN said on Friday that it planned to offer N212.85 billion treasury bills maturing between 91-days and 1-year this week. It also said it would sell N45.85 billion worth of the 91-day bills, N62 billion of the 182-day paper and N105 billion of the 1-year debt. Payment for the purchase will be effected on Thursday.
The CBN has been selling short-dated open market bills at yields as high as 18 per cent in an effort to bring back offshore funds that had left the country.
On the parallel market on Monday, the naira also fell to N413 to the dollar, down from the N412 to the dollar last Friday.
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