Money market rates stable on FAAC disbursement

By Ademola Alawiye


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

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

According to the money market report prepared by FSDH Securities Limited, available data shows that the seven-day Nigerian Inter-bank Offered Rate closed the week at 9.46 per cent, indicating a four basis point decrease from the previous week‘s figure of 9.50 per cent.

The 90-day NIBOR closed the week at 12.42 per cent, representing a 51basis points decrease from the 12.93 per cent recorded the previous week.

At the three-year FG Bonds auction, a total of N40bn was offered, with N37.78bn subscribed, leading to a subscription level of 94.45 per cent, while total allotment was N26.67bn, representing 70.59 per cent of the amount demanded.

At the seven-year FG bonds auction, a total of N62.81bn was offered, the N54.10bn subscribed leading to a subscription level of 86.13 per cent, while total allotment was N37.50bn, representing 69.32 per cent of amount demanded.

Further analysis showed that there were no activities at both the primary and secondary segments of the government securities market during the week.

At the foreign exchange auction, the Central Bank of Nigeria 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 was demanded.

The value of naira appreciated in all the three segments of the foreign exchange market during the week. At the parallel market, the value of the currency 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; while at the official market, the currency gained by 30 kobo to close at N148.96, as against N149.01 recorded last week.

Source:http://www.punchng.com/Articl.aspx?theartic=Art20101025152795