•As dollar shortage cripples naira
The federal government sold N50 billion worth of naira-denominated bonds at higher yields auction on Wednesday, December 9 to attract investors.
The higher interest bonds maturing 2020 and 2024 were auctioned at a day when the naira weakened further in the parallel market after the Central Bank of Nigeria’s exclusion of some Bureau De Change (BDC) operators from its dollar sale created a shortage of dollars.
Thus the naira was quoted at an unofficial N251.5 on Wednesday and dropped further down to N253 to the dollar on Thursday, December 10 representing 0.59 per cent decline on Thursday.
Reuters had reported that the CBN excluded about 1,801 BDC operators from its dollar sale on December 9 while selling $30.5 million to 1,017 others in its weekly sale.
“That led to a shortage of dollars on the unofficial market and pushed the naira lower,” Aminu Gwadabe, president of Nigeria’s Bureau De Change association, said.
“We are in contact with the CBN to resolve issues around the exclusion of some of our members from the forex sales and we are expecting positive response,” he added without disclosing the issues in dispute.
It was not surprising therefore that the Debt Management Office (DMO) on December 9 issued N30 billion in the 2020 debt at 10.95 per cent, up from 10.24 per cent at the previous auction in November.
The same tenor bond closed at 10.80 percent at the secondary market on December 9.
A statement by the DMO also said a total of N20 billion of the benchmark bond maturing in 2024 was issued at 11 per cent compared with 10.01 per cent same tenor debt attracted at the November auction.
The 2024 paper closed at 10.99 per cent at the secondary market on December 9.
The naira traded at N198.97 to the dollar on the official interbank market, close to a rate at which it has been pegged since February.