Naira recovers to 155.70

Naira recovers to 155.70

Naira recovers to 155.70

March 18 (easykobo) - Naira recover to 155.70 in the parallel market as the Debt Management Office sold N 60 billion in 5 year and 3 year sovereign bonds at its third debt auction of 2011. The bonds are yielding 12%, up 1% from last debt auction. This clearly underlines investor disquiet about fiscal policy and the currency value. Earlier this week the senate passed $37 billion budget that increases government spending at the cost of infrastructure development. The Naira was trading at 157 to 1 US Dollar at 3PM at the real market in Lagos. To stay up to date with Nigeria's financial environment, visit www.easykobo.com daily

The CBN governor has spoken about maintaining Naira between 146.50 and 154.50 and some measures have been put in place to achieve that. CBN has asked banks buying foreign exchange at its auctions to submit lists of customers for which the purchases are occurring, to verify the demand is for commerce rather than for speculation. It also plans to start selling short-tenored forex forward contracts from next Wednesday as part of efforts to smooth demand and help businesses hedge their currency risk. This could reduce the threat of panicky sales of naira. Also CBN made Chinese Yuan tradable in Nigeria in January, another move to reduce the buying pressure on the US Dollar.

However it is the big demand for Dollars that is leading to the fall in Naira value. The political uncertainty before next month's general election is the reason for this. Naira could recover substantially once the elections are over and a government is elected.

NSE also bounced back today from yesterday 2.4% plunge. In the Afternoon it seemed to be yet another down day on the stock exchange but towards the end of the day, NSE was able to claw into green and close higher by 0.17%. Most banks declined due to investor concerns about their profits being reduced because of higher borrowing costs and falling Naira.

Among the Banks,

Zenith Bank gained 0.7%

Access Bank gained 0.96%

UBA declined 4.7%

First Bank declined 4.3%

GT Bank declined 0.15%

In the Insurance sector,

AIICO gained 1%

Prestige declined 4.6%

Niger declined 4.1%

For more stock prices enter the stock symbol on the top left box on Easykobo and press "get quotes". For example for AIICO stock price, enter "AIICO" on the box on top left of Easykobo and press "get quotes".

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