Naira On Steady Rise, Appreciates 0.62% To N1,255.07/$

The Naira on Thursday appreciated by 0.62 percent in the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, closing at a rate of N1,255.07 against the dollar.

The local currency at the FMDQ Exchange recorded a high and low, N1,294.00 and N1,200.00 against the dollar, respectively.

The Naira has sustained positive momentum lately following the Central Bank of Nigeria (CBN) numerous reforms in the foreign exchange market.

Meanwhile the apex bank intensified efforts to manage money supply by conducting its first Open Market Operations (OMO) auction in April 2024, through which it sold N676.65 billion.

There was significant interest from investors in the 363-day OMO auction by CBN, with subscriptions reaching N1.16 trillion, thus oversubscribing to the N350 billion bills offered.

The apex bank sells the 365-day OMO bills at a high of 21.13 percent, marking it another record high for the institution as it determined to tackle the inflation rate and stabilize the local currency

The CBN’s total sales for the 365-day OMO auction stood at N652.40 billion.

The 188-day bill also had N75 billion on offer, but saw a lower subscription of just N20.25 billion, with a stop rate of 19.5% and only N7.25 billion sold.

For the 97-day bill, N75 billion was made available, with N17 billion subscription by investors at a stop rate of 19%. The CBN, however, sold N17.00 billion on 97.day OMO offered Apriil 3, 2024.

The central bank’s aggressive OMO auctions reflect its proactive approach to controlling liquidity in the economy.

By selling bills at high interest rates, it aims to mop up the excess money supply, which is crucial for combating inflation and supporting the exchange rate.

The high interest rates also indicate the central bank’s commitment to making Nigerian securities attractive especially to foreign investors, thereby drawing in capital that can help stabilize the financial market. The auction in April 2024 is the first since the CBN’s Monetary Policy Committee raised the Monetary Policy Rate (MPR) to 24.75 percent in March 2024.