Build-Up Of $535m Pushes Nigeria’s Reserves To $36.40bn
The $535 million build-ups in four straight weeks have pushed the country’s foreign reserves to $36.40 billion data from the Central Bank of Nigeria (CBN) has shown.
The growth driver was attributed to the reserve accretion to the inflow of Rapid Financing Instrument (RFI) facility by the International Monetary Fund (IMF), which continues to outweigh FX outflows.
Nonetheless, the Naira depreciated against the USD by 0.10% w/w to NGN386.33/USD at the I&E window and by a steeper 2.2% w/w to NGN460.00/USD in the parallel market.
Meanwhile, in the just concluded week, CBN refinanced matured T-bills worth N59.37 billion via Primary market at lower rates for most maturities: Stop rates for the 91-day bills and the 182-day bills fell to 2.45 percent, from 2.50 percent and 2.72 percent from 2.85 percent respectively.
The 364-day bills rose to 4.02 percent from 3.84 percent. N114 billion worth of T-bills was auctioned in the outgone week via OMO. Meanwhile, N303.17 billion worth of treasury bills matured via OMO which, combined with the primary market maturities worth N59.37 billion, resulted in total inflows worth N362.55 billion.
Hence, the net inflows worth N248.55 billion led to a boost in the financial system liquidity as the Nigerian Inter-Bank Ordered Rate (NIBOR) for overnight funds fell sharply to 3.50 percent from 12.06 percent. However, NIBOR for 1 month, 3 months, and 6 months tenor buckets rose to 5.87 percent from 5.68 percent, 6.12 percent (from 6.04 percent), and 6.99 percent (from 6.65 percent) respectively.
Furthermore, the Nigerian Inter-Bank Treasury Bills True Yield (NITTY) moved northwards for all maturities tracked amid renewed bearish activity: yields on 1 month, 3 months, 6 months and 12 months maturities rose to 2.08 percent (from 2.05%), 2.26 percent (from 2.13%),2.66 percent (from 2.59%) and 3.56 percent (from 3.49%) respectively.
In the new week, treasury bills worth N155.83 billion will mature via OMO; hence, analysts expect interbank interest rates to increase amid a boost in financial system liquidity.
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