The nation’s overnight rate surged on Tuesday, June 21, as the Central Bank of Nigeria, CBN, intervened on the second day of foreign exchange trading at the interbank market due to rising liquidity concerns which stalled trade.
Overnight rate soared to 60 per from 18 per cent, as banks expected the CBN to debit them around N1.2 trillion to cover hard-currency purchases.
The apex bank had sold around $4 billion on Monday, June 20 in spot and forward trades on the interbank market to clear the backlog of foreign exchange demands.
In non-deliverable forward markets, the one-year naira-dollar forward were quoted at N349. The nine-month contract fell as low as N337 per dollar while the six-month contract traded at N327.
Meanwhile, Nigeria’s dollar-denominated bonds jumped as much as half a cent, a day after the apex bank abandoned its currency peg in an effort to ease chronic foreign currency shortages.
The 2021 issue gained 0.51 cents to trade at 99.760 cents in the dollar – its highest level since early November, according to Tradeweb data. The 2023 issue rose 0.40 cents to 96.150 cents, its highest level in more than 10 months.