Naira gains as FX turnover rises by 261.49%

Nigeria’s currency on Wednesday gained 0.13 percent against the dollar as the exchange rate closed at N410.95k compared to N411.50k quoted on Tuesday at the official window.

Currency traders who participated at the trading session on Wednesday maintained bids at between N400.00 and N420.77k per dollar, data from the FMDQ indicated.

The Naira appreciation followed increased liquidity as the foreign exchange market turnover rose significantly by 261.49 percent to $226.98 million on Wednesday from $62.79 million recorded on Tuesday.

At the Bureau De Change (BDC) segment of the foreign exchange market, Naira firmed by 0.40 percent to close at N498 per dollar on Wednesday as against N500/$ on Tuesday. Naira steadied at N500 per dollar at the black market.

The Nigerian Treasury bills secondary market closed on a flat note on Wednesday, with the average yield across the curve remaining unchanged at 6.26 percent, FSDH research noted.

Average yields across short-term, medium-term, and long-term maturities closed flat at 4.03 percent, 5.51 percent, and 8.22 percent, respectively.

At the Primary Market Auction held on Wednesday, the Cebtral Bank offered NT-Bills worth N91.27 billion across the 91-day (N4.74 billion), 182-day (N7.82 billion), and 364-day (N78.71 billion) tenors.

Overnight (O/N) rate increased by 0.50 percent to close at 15.17 percent as against the last close of 14.67 percent, and the Open Buy Back (OBB) rate increased by 0.33 percent to close at 14.67 percent from 14.34 percent on the previous day. Money market rates are likely to remain elevated due to the expected Open Market Operation (OMO) auction and FX retail auction later in the week, analysts at FSDH research said.

In the OMO bills market, the average yield across the curve decreased by 12 bps to close at 9.65 percent as against the last close of 9.77 percent. Buying interest was seen across long-term maturities with the average yield compressing by 24 bps. However, the average yields across short-term and medium-term maturities remained unchanged. Yields on 9 bills compressed with the 22-Feb-22 maturity bill recording the highest yield decline of 48 bps, while yields on 13 bills remained unchanged.

The Federal Government of Nigerian bonds secondary market closed on a flat note on Wednesday, as the average bond yield across the curve remained unchanged at 9.75 percent. The average yields across the short tenor and long tenor of the curve remained unchanged. However, the average yield across the medium tenor of the curve expanded by 1 basis point. The 27-MAR-2050 maturity bond was the best performer with a decline in yield of 6 bps, while the 17-MAR-2027 maturity bond was the worst performer with an increase in yield of 3 bps.