The Central Bank of Nigeria on Friday mopped up about N206 billion from the interbank market in a bid to drive out excess liquidity. Excess liquidity refers to the cash circulating within the economy which the CBN feels is driving up inflation or lowering interest rates.
Analysts believe this was carried out in anticipation of the planned implementation of the flexible exchange rate policy set to start in Monday 20th June 2016.
According to a Reuters report,
Banking system credit opened at 1.06 trillion naira ($5.3 bln) on Friday, compared with 401.72 billion naira last week, traders said.
The excess liquidity prompted the central bank to sell 205.9 billion naira ($1.03 billion) worth of one-year bills on Friday at 13.5 percent, compared with the secondary market rate of 10.81 percent, traders said. The bank had offered 78 billion naira in bills on Thursday.
By mopping up the excess liquidity, the CBN is effectively hoping that there will be less Naira available to chase the dollars when the new interbank market eventually opens on Monday. Analysts opinion monitored since the announcement was made on Tuesday suggest that the exchange rate could open at any price within N250 and N370 indicative of the type of uncertainty currently existing in the minds of most people.
Nothing is new in Nigeria,to be or not to be.if govt experimenting with the lives of Nigerian ?.NOW THE IMPORTANT QUESTION,HOW LONG WILL ALL GOVT WILL STOP TINKERING WITH THE LIVES OF NIGERIANS.i felt the govt will uses statatics to move and processes the economy WITH THE SOLE PURPOSES OF EITHER (1) AMEND BABANGIDA STRUCTUAL ADJUSTMENT PROGRAMME (2) PURSUES ECONOMIC GROWTH,I.E, PUT THE SYSTEM THAT WILL DRIVETHE ECONOMY,now you tells Nigerian this is what the govt will do for Nigeria and for Nigerians(3)THE GOVT IN THEIR WISDOM TELLS NIGERIANS.THIS IS OUR PROGRAMME FOR THE NEXT FRW YEARS,WE WILL CONTROL INFLATION,AND TELLS NIGERIANS BE PATIENT WITH US FOR 2YEARS,BECA– USE THE ECONOMY IS GETTING OUT OF CONTROL.(3) WE WILL STICK WITH OUR MANIFESTO,AND NIGERIANS WILL UNDERSTAND AND TRUST THE GOVT.(4)GOVT WILL TELL NIGERIANS THERE IS A CHANGE IN GOVT POLICIES,SINCE WE TOOK OVER, ECONOMIC CIRCUMSTANCES HAVE FORCED TO CHANGE OUR PROGRAMME,there is a slight changed,we the govt hoped will address all issues security,uneployment.access to funds will be in structure.we are going to set target,so any Nigerians on deathbed due to lack of hope,will pick-up hope,and look forward that all my problems all solve i hoped to marries a second wife or I want to change this my car).now with govt this statement.i will take a better decision on this synergy that this govt created