Nigeria sells treasuries to keep naira liquidity tight

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Nigerian naira notes are seen in this picture illustration March 15, 2016. REUTERS/Afolabi Sotunde/Illustration/File Photo - RTSFNNR

LAGOS, Oct 19  – Nigeria’s central bank sold 98 billion naira of treasury securities on Thursday to keep liquidity tight to support the currency, a day after it auctioned 133.25 billion naira of T-bills, traders said.

The local naira currency has been stable for more than two weeks, supported by central bank interventions, foreign inflows and tight liquidity on the money markets, traders say.

On Thursday, the bank sold the 91-day bill at a higher interest rate of 16 percent plus a 196-day bill at 17.81 percent.

At Wednesday’s auction, it sold 10.25 billion naira of a 91-day bill at an interest rate of 13.1 percent, 11 billion naira of 182-day bills at 15.3 percent and 112 billion naira of one-year paper at 15.59 percent.

Total subscriptions were 194.6 billion naira.

The money market has been short of liquidity for more than a week due to central bank action to mop up naira following the recent maturity of some 86 billion naira of treasury securities, traders said.

The currency was quoted at 305.60 on the official market on Thursday, a level around which it has closed for more than three months. It traded at 360 per dollar for investors and at 363 naira on the parallel market. (Reporting by Chijioke Ohuocha; Editing by Catherine Evans)

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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