N200 bn BOI fund lifts interbank market
*As forex demand jumps by 54%
By Babajide Komolafe
The scarcity of funds in the interbank money market ameliorated on Wednesday following inflow of about N200 billion from the Bank of Industry.
Meanwhile, demand for foreign exchange at the official market rose by 54 per cent this week, but the naira to appreciate by 107 kobo at the interbank segment on Wednesday.
The inflow caused cost of funds to fall significantly on Wednesday.
Interest rate on Call lending fell to 5.0 per cent from 8.3 on Tuesday, while cost of 7-Days and 30-Days lending dropped to 6.67 and 9.37 per cent from 9.0 and 10.29 per cent.
From $452.28 million last week, demand for foreign exchange rose to $697.29 million at the two auctions conducted by the Central Bank of Nigeria (CBN).
The amount sold stood at $617.79 million, indicating 54.5 per cent increase when compared with the $400 million sold the previous week.
In spite of the increased demand, the naira however appreciated in the official market.
The official exchange rate had rose by 11 kobo on Monday before falling by 16 kobo to N150.45 per dollar on Wednesday.
When compared to the N150.5 closing rate of last week, the naira appreciated by five kobo.
The interbank exchange rate followed a similar pattern first rising by 124.74 kobo to N153.7475 per dollar only to fall by 107.25 kobo to N152.675 per dollar on Wednesday.
When compared with the closing rate of N152.505 the previous week, the naira had depreciated by 17 kobo as at Wednesday in the interbank market
It would be recalled that the naira depreciated marginally in the official market last week, losing nine kobo to the dollar due to 18 per cent rise in foreign exchange demand.
The official exchange rate rose to N150.4 from N150.3 the previous week. Results of the Wholesale Dutch Auction System (WDAS) sessions conducted by the CBN show that total demand rose to $452.28 million from $380.71 million the previous week, while the amount sold by the apex bank rose slightly by 6.9 per cent to $400 million from $374 million.
In the first session held on Monday, demand rose by 82 per cent to $225.8 million from $124.04 million, while the official exchange rate rose marginally by three kobo to N150.34.
In the second session on Wednesday, demand was relatively stable at $226.48 million while the exchange rate rose by five kobo to N150.4 per dollar.
The interbank exchange market opened the week with 22.75 kobo depreciation of the naira, with the interbank rate rising to N152.7275 from N152.5 the previous week.
The interbank rate however fell consistently from N152.665 on Tuesday to N152.2825 on Thursday, indicating 54.5 kobo appreciation.
This trend was however reversed on Friday, as the interbank rate rose by 22.5 kobo to N152.505. Cumulatively, the naira lost 0.5 kobo at the interbank for the week.
