The local currency trended up in the week to Thursday due to the drop foreign exchange flows from on I&E window, the bank said in a note to its clients on Friday.
"NAFEX closed up at 360.56 from 360.29 recorded at the end of last week while External reserves closed the week down at $45.135 billion from $45.149 billion the prior week," Citibank wrote in its newsletter to clients.
"We could see some USD selling interest if the exchange rate crosses 361.00 in the coming week. Our estimated range for FX rate in the coming week is between 360.00 and 361.50 with sellers expected at the top end of the range."
INTERBANK LENDING
The money market experienced high level of liquidity in the week as the Central Bank Of Nigeria (CBN) declined to sell treasury bills at the Open Market Operations (OMO window, leaving many banks with bulging vaults.
Cost of borrowing among banks at the interbank market also remains subdued as Overnight rates traded largely between 3% and 5 % in the week.
"The treasury bills market has been quite bullish this week as a result of the excess money market liquidity boosted by the CBN's circular limiting access to its Standing Deposit Facility (SDF) to N2bn from N7.5billion."
"Buyers were largely local players looking to deploy the excess liquidity. Consequently, discount rates dropped by an average of 75 basis points.
"FGN Bonds prices also rallied late in the week after opening the week on a relatively quiet note. Yields slid by 15-25 bps across the curve with the sharpest decline seen on the short end of the bonds curve (2-5 years)."
* Source: Citibank Nigeria
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