Naira trades at N425 for two days at parallel market

•As Nigeria plans to raise N120bn

The naira on Tuesday maintained some level of stability as it exchanged for N425 against the dollar at the parallel (black) market, same as it traded on Monday.

The local currency however, lost 0.23 per cent having exchanged for N314.92 to the dollar on Tuesday compared to Monday’s close of N314.20 to a dollar at the interbank market in Lagos.

The local unit at the same official window, on Tuesday, was exchanged for N407.3843 and 340.8769 to one Pound Sterling and one Euro, respectively.

Meanwhile, Nigeria plans to raise N120 billion ($387 million) in local-currency denominated bonds at an auction on September 14, the government’s Debt Management Office (DMO), said on Tuesday.

The debt office said it would raise N40 billion each from debt maturing in 2021, 2026 and 2036, using the Dutch auction system.

All the bonds, it stated are reopening on previously issued debt, stressing that it will borrow around N900 billion from the local debt market this year to fund a budget deficit projected at N2.2 trillion.

The foreign exchange market continued to writhe from the impact of the Apex Bank’s decision to suspend some banks from interbank market, with the impact felt more at the parallel market. Accordingly, parallel market rate depreciated throughout last week, from N413.00/$1.00 on Monday to N420.00/$1.00 by midweek and a low of N425.00/$1.00 on Thursday.

At the interbank, the spot rate traded within a tight range, hovering between N318.83/$1.00 at the start of the week and N313.31/$1.00 by Thursday, an appreciation from penultimate week Friday’s N314.95/$1.00 on the back of CBN’s interventions during the week as well as $327.00 million worth of FX inflow, out of which $270.00 million was channelled into the local debt market.