CBN raises intervention at interbank market to $6m – Today

CBN

A day after fine-tuning the foreign exchange policy, the Central Bank of Nigeria (CBN) made good its pledge to increase daily intervention at the interbank market, raising it from $1.5 million to $6 million.

However, the official exchange rate remained at N305.25 per dollar, although the CBN’s intervention was auctioned at N304.75 per dollar.

The move is part of efforts to ease acute forex scarcity and reduce the wide gap between the official and parallel markets.

Already, a broad gauge of the parallel forex market has shown that naira has gained N4 to settle at N516 per dollar, having depreciated to N520 per dollar on Monday, in reaction to the policy.

The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, said the new policy was felt in the market yesterday and the local unit appreciated in return.

For him, the challenge remained the long term sustainability of the policy with respect to supply of the currency to the market, increased inflow through stable crude oil price, production and foreign investments.

Meanwhile, CBN has planned a N310.22 billion treasury bills’ auction for next week, with a 91-day bill worth N26.14 billion; 182-day, N62 billion; and 12-month bill, N222.08 billion.

The move is part of efforts to raise funds for the 2017 budget deficit, control quantity of money in circulation and step up fight against inflation that is currently at 18.72 per cent.

To achieve the goals of the new policy, CBN said all banks would receive amounts commensurate with their demand per week, while it would support the inter-bank market to ensure adequate liquidity.

Pursuant to this, the apex bank yesterday sold $500 million on a 60-day forward contract, as opposed to 180-day contract before now, to help boost dollar supply in the forex market.

Similarly, the Federal Government wants to take advantage of the policy revision to strike a new deal with the World Bank to the tune of $1 billion.

The Minister of Finance, Mrs. Kemi Adeosun, who made the disclosure in a monitored programme, said beside plans to borrow the amount, government also hopes to sign $1.3 billion loan from China’s Export-Import Bank for the railway projects soon.

“IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems now. It only has a fiscal problem.

“Already, we are doing much reform like IMF would want, but we want to take responsibility for our future. We must have our home-grown, home-designed programme of reform,” she said.

Naira firms up, stock market gains, as new forex policy takes effect – The Cable

dollar to naira

The naira moved to 515 per dollar on Tuesday, following the introduction of new policy actions by the Central Bank of Nigeria (CBN).

The naira, which was trading at 520 to the dollar on Monday, after falling from 510 the previous week, firmed on Tuesday evening, at the parallel market.

Nigerian Stock Exchange (NSE) also gained over N740 million on Tuesday, following the policy implementation.

The capital market saw its market capitalisation move from N8,738,370,947,609.24 on Monday to N8,739,112,337,168.61, while all share index gained a few more points on the trading floor, to hit 25,251.63

About 24 hours later, the apex bank, which went to the market with $500 million, sold $370.9 million to 23 banks at rates between N315 to N360 per dollar.

On Monday, the CBN introduced fresh policy actions, which seek to provide more foreign exchange for Nigerians, seeking its use for personal and business purposes.

Lukman Otunuga, research analyst at FXTM, describe the policy adjustment as a logical move by the apex bank.

“With the dollar demand for school fee payments overseas and personal travel allowance enforcing downside pressures on the parallel market, the move by the CBN to sell dollars to retail users via commercial lenders seems logical,” he said.

The CBN says it remains committed to ensuring adequate liquidity flows in the foreign exchange market.

Success of Eurobond linked to increased appetite of foreign investors for Nigeria – Guardian

• As trading on bond commences on LSE platform

The International Markets Unit – Head of Middle East, Africa and South Asia, London Stock Exchange, (LSE), Ibukun Adebayo, has described the success of Nigeria’s bond listing as a strong indication of international investors’ interest in building exposure to the nation’s economy.

Adebayo said this during the listing of the Nigeria’s $1 billion 15-year government bonds on LSE platform.

According to him, the listing, which secured high quality investor support from across the United States and Europe, would support Nigeria in financing its long-term infrastructure projects.

Adebayo explained that the listing of the bond on LSE builds on the recent pipeline of several high profile sovereign, supranational, municipal and private company bond issuances on the LSE.

He noted that the offer, nearly eight times oversubscribed, reaching approximately $7.7billion, highlights strong international investor demand and demonstrates confidence in Nigeria’s economy.

Furthermore, Adebayo added that the listing reinforces LSE status as a strong partner to Nigeria, as well as the City’s readiness to provide a deep additional channel of finance for the development of Nigerian infrastructure and the growth of the economy.

“In January 2017, Israel listed its largest ever Eurobond offering of €2.25 billion in London. Nigeria’s choice of London Stock Exchange for its first international bond offering since 2013 underlines LSE position as a leading global venue for debt fund raising and London’s enduring status as a market open to the world.”

Also, the Economic Secretary to the Treasury, Simon Kirby, said: “I am delighted that the Nigerian government has chosen London as the location to list its $1 billion sovereign bond. This issuance underlines Britain’s position as the world’s leading global financial centre and strengthens our economic and financial relationship with Nigeria.”

With a coupon of 7.875 per cent, the 15 year government bond, is the longest ever maturity for an international Nigerian bond, the first international issuance for the country since 2013. The offer was nearly eight times oversubscribed, with the order book closing at approximately $7.7 billion.

LSE Group has a long history of supporting the development of African capital markets and investment in African companies.