FX Market Trades $327m as Offshore Funds buy Bonds

Nigeria's currency market registered $327 million worth of trades on Monday, about six times more than its usual volume, the market regulator told Reuters.

That included a single $270 million transaction at 345 naira per dollar, by foreign investors buying local currency bonds, Bola Onadele, the managing director of FMDQ OTC Securities Exchange, said in an interview. Other transactions were carried out from 314.50 to 317.34 per dollar.

Average trading is around $50 million a day on normal days. It might reach $100 million on days the central bank intervenes in the currency market.

Traders also said the central bank sold an undisclosed amount of dollars, close to the end of market session, to help prop up the naira. The currency closed at 305.50 on Monday, around the level where it's closed for the past week.

Monday's surge in trading came after the central bank said on Friday that it would offer 212.85 billion naira ($675 mln) in treasury bills maturing between 91 days and one year on Wednesday. The debt will be sold on Wednesday.

The bank has been selling short-dated open market bills at yields as high as 18 percent in an effort to attract offshore funds, most of whom fled Nigeria's bond and equity markets during a financial crisis that began when oil prices plunged.

The crisis ultimately led the central bank to let the naira's value float, in June. From its controlled rate of 197 naira to the dollar, the Nigerian currency plunged to as much as 309 to the dollar on the interbank market and 412 to the dollar on the black market.