CBN Governor, Sanusi Lamido Sanusi
The amount of the United States (US) dollar offered by the Central Bank of Nigeria (CBN) at its regulated Wholesale Dutch Auction System (WDAS) fell by 10.67 per cent to $1.590 billion in September, data compiled by THISDAY have shown.
The data gathered from the CBN’s website showed that the amount reflected a drop in the amount of the greenback offered by the regulator by $190 million, as against a total of $1.780 billion in August.
During the month under review, eight sessions of the bi-weekly auction was held. A breakdown showed that while the central bank supplied a total of $200 million at four separate auctions, $180 million at three auctions, it supplied $250 million to dealers at its September 24 auction.
The highest value the naira attained at the WDAS last month was N155.80 to a dollar, while its lowest value was N155.78 to a dollar which is its current rate.
Financial analysts said that the relative stability enjoyed by the local currency last month resulted from the firm monetary policy decision by the Monetary Policy Committee (MPC).
The MPC held the monetary policy rate (MPR) at 12 per cent at its September meeting. The committee also retained the Cash Reserve Ratio at 12 per cent as well as other monetary policy instruments.
Nigeria’s year-on-year(yoy) inflation fell to 11.7 per cent in August, from 12.8 in July.
Also, Nigeria’s foreign exchange reserves climbed by 5.9 per cent to $41.156 billion as at September 27, from $38.854 billion in August.
Analysts at Renaissance Capital (RenCap) said: “This solid improvement in reserves is reflected in the greater naira stability year-to-date compared with 2011, and the strengthening of the naira over the past two months. Nigeria’s current account (C/A) surplus grew 14 per cent yoy in the first quarter 2012, following an 11 per cent increase in exports to $25 billion, while portfolio inflows increased more than twofold to $3.8 billion.
“We expect the second quarter of 2012 current account numbers to show a slowdown in export earnings growth, due to the fall in the oil price during the period, but we project an improvement in third quarter of the year owing to the recovery of the oil price, which the MPC expects to remain firm.
“Credit extended to the private sector only increased 4.7 per cent between December 2011 and July 2012, despite yoy growth rates of over 40 per cent. We thus expect a pick-up in credit growth from first quarter 2013, and for this to accelerate once rates begin to ease.”