Again, CBN Defends The Naira With 35 Billion Naira
The Central Bank of Nigeria plans to sell 35 billion naira in short-dated treasury bills as part of efforts to mop up the excess cash from the banking system.
The CBN also plans to support the local currency.
The bank will sell 5 billion naira of the 190-day open market operations (OMO) bills and 30 billion naira of 330-day paper, according to a notice cited by currency traders.
Sales of treasury bills support the currency by draining cash from the market and curbing speculative demand for foreign exchange.
After introducing a multiple exchange rate system, the apex bank has been intervening since February to prop up the naira, a victim of a sharp fall in the oil price and Nigeria's first recession since 1991.
Last week, the CBN mopped up around 400 billion naira from the banking system, pushing up interbank rates and leaving some banks scrambling to find cash to cover their positions.
The bank will also auction 140 billion naira in bonds on behalf of the debt management office on Wednesday as part of measures to fund a portion of this year's budget deficit, estimated at around 2.36 trillion naira.