Global liquidity to drive naira value as CBN confronts new era

The level of global liquidity will increasingly determine the naira – dollar exchange rates as the Central Bank of Nigeria (CBN), confronts a new era of a domestic economy that is more closely integrated and co-related with the global economy.

Analysts say the naira value will be influenced mostly by events outside the control of the CBN. These are the level of global liquidity as U.S economic stimulus or quantitative easing (QE) begins to get rolled back, which in turn will affect the price of oil.

“The outlook for the naira is hinged on the relative availability of liquidity in the global economy,” said Ayo Teriba, CEO of Economic Associates, a risk analysis and research firm.

The naira traded at N163.93 against the

Interbank rate up at 10.50 percent after T-bill sale

Nigeria’s interbank lending rates inched up this week to an average of 10.50 percent on Friday, up from 10.37 percent last week after a treasury bill sale drained liquidity, dealers said.

The Central Bank of Nigeria (CBN) sold a combined N200 billion ($1.2 billion) worth of bills on Monday and Thursday this week, to manage excess liquidity. It also sold N114.39 billion  in treasury bills at a primary market auction.

The market opened with a cash balance of