CBN offers $200m for sale at forex auction

The Central Bank of Nigeria

The Central Bank of Nigeria on Wednesday intervened in the foreign exchange market, offering $200m for sale at the foreign exchange auction.

The CBN in a statement posted on its website, said, ”Further to our circular, referenced, “TED/FEM/FPC/01/110/09” of July 8, 2009, the CBN hereby intervenes with an offer of $200m for sale at the foreign exchange auction of October 27, 2010.”

The statement added that the authorised dealers were invited to submit their bid requests for the Wholesale Dutch Auction System through “Reuters dealing 3000 xtra to the CBN Abuja.”

It added, ”The dealers are also reminded that their current accounts with the CBN must be adequately funded on the day of bidding and the accounts should remain funded at the time of disbursement, failing which the bids will be disqualified.”

The money market was relatively liquid last week as a result of the N216.80bn disbursement from the Federation Accounts Allocation Committee that hit the system for the month of October.

The injection mitigated the withdrawal of about N204.99bn from the system through the government securities market and the foreign exchange auction market, which moderated the inter-bank rates.

According to the money market report prepared by FSDH Securities Limited, available data showed that there were no activities at both the primary and secondary segments of the government securities during the week.

At the foreign exchange auction, the CBN had offered a total of $500m, while demand stood at $551.03m. The total sale stood at $547.24m, representing 99.31 per cent of what had been demanded.

The value of the naira appreciated in all the three segments of the foreign exchange market last week. At the parallel market, the value of the naira appreciated by 50 kobo, to close at N153.50, compared to the previous week‘s figure of N154.

At the inter-bank market segment, the naira appreciated by 80 kobo to close at N152.23 compared to the previous week‘s figure of N152.31.

Source:http://www.punchng.com/Articl.aspx?theartic=Art20101028125535