CBN sterilises another N72b, interbank rates – Guardian

The money market observed the weekend with less liquidity in circulation as the apex bank sustained its efforts to support naira exchange rate by N71.6 billion mop-up exercise.

The action, executed through the treasury bills auction of 195-day instrument, also gave the holders an 18 per cent interest.
Meanwhile, the interbank lending instruments- Open Buy Back (OBB) and Overnight RATES remained high, at 18.17 per cent and 20 per cent respectively, but lower than last week’s record.

Besides, the instruments have traded at that range all week, as low liquidity and the persistent cash withdrawal through treasury bills sales by the regulator continued.

 But the optimism among traders has rebounded over tapered interbank rates this week, as signal for the disbursement of July’s budgetary allocation to agencies of government is strong.“Hopefully, the financial system will get the July allocations as the weekly activity resumes. That will help to moderate the interbank lending rates, which has been high. This will only last if there is no big intervention from the regulators again,” a forex trader said.

The Naira on Friday continued its free fall at the parallel market to N412 per dollar, while on some other areas of Lagos, it went for N410 per dollar.

Read more at http://guardian.ng/business-services/cbn-sterilises-another-n72b-interbank-rates/