The Central Bank of Nigeria borrowed N212.85bn ($654.92m) in an auction of Treasury bills on Wednesday, with yields little changed from previous sales, data from the Debt Management Office showed on Thursday.
The debt office raised N45.85bn of three-month paper at 14.38 per cent, down from 14.99 per cent in mid-August; N62bn of six-month bills at 17.50 per cent, up from 17.48 per cent, and N105bn of one-year paper at 18.42 per cent, down from 18.50 per cent.
Higher subscriptions on the one-year sale suggested some offshore investors participated, market players said.
On Monday, offshore investors traded about $270m through the interbank forex market to fund investments in naira debt.
Sovereign dollar bonds fell across the curve to their lowest level in more than two weeks on Wednesday after official data showed the economy contracted by 2.06 per cent in the second quarter, Reuters reported.
The 2023 issue chalked up the biggest losses, down 0.728 cents to trade at 99.417 cents in the dollar – its lowest since August 15, according to Tradeweb data.
The 2021 bond slipped by 0.489 cents to 102.156 cents while the 2018 issue lost 0.603 cents to trade at 101.167 cents.
Data from the National Bureau of Statistics showed the non-oil sector declined due to a weaker currency while lower oil prices dragged the oil sector down.
The lingering scarcity of foreign exchange had pushed the naira to an all-time-low of 420 against the United States dollar at the parallel market on Wednesday.
This followed data released by the National Bureau of Statistics on Wednesday, confirming that the economy was in recession.
The NBS data showed that the Gross Domestic Product shrank by 2.06 in the second quarter, after contracting by 0.36 in the first quarter.
Before dropping to 420/dollar on Wednesday, the local currency had traded at 418 in Kano, 417 in Abuja and 415 in Lagos on Tuesday. It closed at 414 against the greenback on Monday.
But Bureaux de Change operators raised hope of a gradual appreciation of the local currency in the near term as the CBN licensed 11 new International Money Transfer Operators to address the dollar supply side.
“Depending on the effective implementation of the central bank’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollar to sell to bureaux de change and provide the needed liquidity in the market,” the President, National Association of Bureaux de Change Operators of Nigeria, Aminu Gwadabe, told Reuters on Wednesday.
Gwadabe said the CBN’s directive that commercial banks should sell dollar inflow through money transfer operators to the BDCs had boosted daily dollar supply to the currencies agencies to around $10m to $20m and this could further boost supply and help support the naira.