Overnight interbank rate was quoted at a record high of 150 per cent on Tuesday, two days after commercial banks placed funds with the Central Bank of Nigeria to participate in last Friday’s currency forward auction.
Traders said few deals were done on Tuesday due to a shortage of naira on the money market, with banks unwilling to place funds among themselves until the result of Friday’s currency auction was published.
On Friday, the CBN held a two-month dollar forward auction to clear a backlog of demand from airlines, manufacturers and other companies, as the exchange rate crisis deepened. Traders said the banks were later directed by the CBN to re-submit bids again on Monday. It was learnt that rates spiked because banks were barred from the CBN’s repo window before any currency auction. The CBN had not announced result of the auction as of Tuesday. Read more