Naira records a new low of N750 per dollar.
Naira on Thursday fell to its lowest ever as demand for dollars increased amid the shortage.
After trading on Thursday Naira lost 0.4 percent of its value as the dollar was quoted at N750/$ compared to N747/$ quoted on Wednesday at the parallel market.
With the current rate, Naira has depreciated by 24.67 percent from N565 per dollar at the beginning of the year at the black market.
At the Investors and Exporters (I&E) forex window, Naira gained marginally by 0.08 percent as the dollar was quoted at N441.13/$ on Thursday from N441.25/$ quoted on Monday, data from the FMDQ indicated.
Most traders who participated in the foreign exchange auction on Thursday maintained a bid at N442.00 (high) and N423 (low).
Naira appreciation at the I&E window also known as the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX), was due to increased transactions.
Consequently, the daily foreign exchange market turnover increased by 134 93 percent to $108.56 million on Thursday from $46.21 million recorded on Monday.
Nigeria’s foreign reserves, which gives the Central Bank the firepower to defend the local currency has declined by 6.76 percent to $37.76 billion as of October 18, 2022 compared to $40.50 billion recorded at the beginning of the year.
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Despite high crude oil prices, Nigeria’s external reserve faced pressure since the second quarter of 2022 amidst lower inflows, a report by the FSDH research stated.
According to the International Monetary Fund (IMF), Total foreign reserves held by emerging markets and developing economies fell by more than 6 percent in the first seven months of this year.
The Washington based Fund said policy responses to currency depreciation pressures should focus on the drivers of the exchange-rate moves and signs of market disruptions.
At the money market on Thursday, the Overnight (O/N) rate decreased by 0.17 percent to close at 16.33 percent as against the last close of 16.50 percent on Wednesday, and the Open Repo (OPR) rate decreased by 0.08 percent to close at 16.17 percent compared to 16.25 percent on the previous day, a report by FSDH research stated.
The Nigerian treasury bills (T-Bills) secondary market closed on a negative note on Thursday, as the average yield across the curve cleared higher by 37 bps to close at 10.46 percent from 10.09 percent on the previous day.
Average yield across the medium-term maturities increased by 100 bps. However, the average yields across short-term and long-term maturities remained unchanged at 5.93 percent and 12.20 percent, respectively. NTB for January 26, 2023 (+300 bps) maturity bill witnessed heavy selling pressure, while NTB September 7, 2023 (-1 basis point) maturity bill witnessed mild buying interest.
The Federal Government (FGN) bonds secondary market closed on a negative note Thursday, as the average bond yield across the curve cleared higher by 10 bps to close at 14.33 percent from 14.23 percent on the previous day. Average yield across the medium tenor of the curve increased by 33 bps. However, the average yields across the short tenor and long tenor of the curve closed flat.
The April 26, 2029 maturity bond was the worst performer with an increase in the yield of 55 bps. Moreover, the secondary bond market is likely to remain subdued in the short term, the report noted.
