The Nigerian foreign exchange market was on Wednesday neutral to the victory of Donald Trump in the United States presidential election.
Trump, 70, emerged the 45th president of the US, after beating Democratic candidate, Hillary Clinton.
Although the naira appreciated against the dollar from 465 to 460 on Wednesday, economic and financial experts said the gain had nothing to do with the outcome of the US election.
Similarly, at the official interbank market, the naira closed at 307.76 on Wednesday, down from 305.5 on Tuesday.
The experts maintained that developments in the forex market and money market had nothing to do with the outcome of the US election.
“The Nigerian money market is not highly integrated enough to reflect the outcome of the US election. Again, the share of foreign portfolio investors in our short-term debt instruments is too small to reflect this,” the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said
A currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, said the interbank market was not liquid enough for the FPIs planning to exit the Nigerian market to do so immediately.
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“The outcome of the US election cannot reflect on our forex market or money market like that; I don’t see any direct impact,” an economic analyst at Afrinvest West Africa, Mr. Ayodeji Ebo, said
On Tuesday, the naira fell briefly from 305.5 to a new low of 375.5 against the US dollar at the official market.
The local currency rebounded after the CBN pumped $1.5m into the interbank forex market to stabilise the battered currency, traders said.
Following the sale of the $1.5m to some commercial banks by the CBN, the naira closed at 305.5 against the greenback, Reuters reported.
The naira had on August 18 touched a rate of 365 briefly but quickly reversed its losses to close at 324/dollar at the official window.
The CBN had in June said it would float the naira but has since kept it stable at around 305 against the dollar via daily its interventions.
Meanwhile, the CBN is planning to sell N119.92bn ($376.22m) in short-dated treasury bills at an auction on November 16, the central bank said on Tuesday.
A total of N32.43bn would be sold in the three-month papers, N22.82bn in a in six-month bills and N64.67bn in one-year bills, the CBN said in a public notice.
It said payment for the purchases would be made on Thursday.
The Federal Government issues Treasury bills to fund the budget deficit, manage banking system liquidity and curb rising inflation.
The country’s 2016 budget deficit was estimated at N2.2tn, of which around N900bn is expected to come from local borrowing.
Source: PUNCH
