CBN governor, London fund managers meet on investment

The Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele met fund managers in London last week to lure investors back into the local naira currency, two banking sources told Reuters on Monday.

Authorities are hoping to boost liquidity on the forex market after the naira weakened.

Emefiele told investors that currency stability would continue, a fund manager and a banking source said.

The CBN carried out two auctions last week in a bid to lure investors. The apex bank auctioned N150 billion ($489.5 million) of open market bills Thursday last week, its second bill sale in a week.

The apex bank last month shifted policy to try to force banks to lend to help revive an economy stuck with low growth after a recent recession.

But with falling oil prices and foreign investors taking profits, the naira is regaining focus, said Reuters.

The apex bank planned to sell the bills with maturities from 84-day to 350-day, traders said, after the central bank auctioned N34.4 billion in treasury bills on last Wednesday at higher rates.

The previous week, the bank sold N100 billion in bills. Pressure has been building on the naira as oil prices drop and foreign investors book profits on local bonds in response to yields which have fallen from as high as 18 per cent a year ago.

In a further sign of pressure on the currency, President Muhammadu Buhari told the central bank on Tuesday to stop providing funding for food imports, his spokesman said.

The naira was quoted at N364 on last week Thursday on thin liquidity.

A dollar shortage was initially caused by a slowdown of foreign inflows after local debt market yields declined.

Nigeria operates a multiple exchange rate regime that it has used to manage pressure on the currency. The official rate of N306.90 is supported by the central bank but the traded rate of N364 is widely quoted by foreign investors and exporters.

Matched content

Be the first to comment

Leave a Reply

Your email address will not be published.