The Naira on Monday appreciated slightly by 0.03 percent against the dollar despite low foreign exchange transactions at the Investors and Exporters (I&E), Nigeria’s official market.
The daily foreign market turnover declined by 49.71 percent to $46.21 million on Monday compared to $69.18 million recorded on Friday, data obtained from the FMDQ indicated.
Consequently, after trading on Monday the dollar was quoted at N441.25 stronger than N441.38 quoted on Friday at the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX).
Most traders who participated at the foreign exchange auction on Monday maintained a bid at N442.50 (high) and N425 (low).
Read also: FX premium between official, parallel markets now N300 per dollar
At the parallel market popularly called black market, the local currency closed at N740 per dollar the same as last Friday.
Last week, the exchange rate at the I&E Window lost 0.50 percent week/week to close at N441.38/US$1. Elsewhere, the foreign exchange (FX) reserves of the Central Bank of Nigeria (CBN) decreased by 0.44 percent to US$37.91bn, a five-week low, as the CBN continues interventions across the various FX windows, according to a report by Coronation research.
“The FX reserve position remains close to its historic high, and we doubt that the CBN wishes to see the exchange rate slip this year. Therefore, we believe that the current I&E Window rate, or something very close to it, can be maintained for at least several months,” analysts at Coronation say.
At the money market, the Nigerian treasury bills (NT-Bills) secondary market closed on a mildly positive note on Monday, as the average yield across the curve cleared lower by 1 basis point to close at 7.29 percent from 7.30 percent on the previous day, a reported by FSDH research noted.
Average yield across the long-term maturities declined by 1 basis point. However, the average yields across short-term and medium-term maturities remained unchanged at 5.93 percent and 6.81 percent, respectively. NTB 9-Mar-23, NTB 27-Apr-23, NTB 11-May-23, and NTB 7-Sep-23 maturity bills witnessed mild buying interest, with a yield decline of 1 basis point.
In the Open Market Operation (OMO) secondary market, the average yield across the curve cleared lower by 1 basis point to close at 10.93 percent from 10.94 percent on the previous day. Average yields across medium-term and long-term maturities declined by 1 basis point each. OMO 14-Feb-23, OMO 7-Mar-23, and OMO 2-May-23 maturity bills witnessed mild buying interest, with a yield decline of 1 basis point each.
The Federal Government of Nigerian (FGN) bonds secondary market closed on a mildly negative note on Monday, as the average bond yield across the curve cleared higher by 1 basis point to close at 14.13 percent from 14.12 percent on the previous day.
According to the report,average yield across the long tenor of the curve increased by 3 bps. However, the average yields across the short tenor and medium tenor of the curve closed flat. The 17-MAR-2027 maturity bond was the best performer with a decrease in the yield of 1 basis point, while the 27-MAR-2035 maturity bond was the worst performer with an increase in the yield of 12 bps.
