Naira maintains steady fall at official, parallel markets

Nigeria’s currency, Naira, has in the past three days maintained a steady fall, depreciating to its lowest at N436.50 per dollar on Wednesday at the Investors and Exporters (I&E), the country’s official foreign exchange market window.

After trading on Wednesday, Naira depreciated by 0.11 percent to N436.50/$ compared to N436.00 quoted on Tuesday at the official market, data from the FMDQ indicated.

Naira depreciation has been attributed to dollar shortage as Nigeria continues to struggle with diversifying and improving foreign exchange inflows.

With the current rate, Naira has depreciated by 3.32 percent from N422 quoted on the first trading day this year.

Most foreign exchange dealers who participated at the FX auction on Wednesday maintained bids between N418.00 (low) and N437.50 (high) per dollar.

At the parallel market, popularly called the black market, Naira stood at N703 par dollar after trading on Wednesday, after weakening by N1/$ from N702 traded on Tuesday.

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The local currency has depreciated by over 19.51 percent at the black market from N565/$ at the beginning of the year.

At the money market, the Overnight (O/N) rate increased by 0.67 percent to close at 13.50 percent as against the last close of 12.83 percent, and the Open Repo (OPR) rate also increased by 0.67 percent to close at 13.00 percent compared to 12.33 percent on the previous day, according to the daily market report by the FSDH.

The Nigerian Treasury Bills (NTB) secondary market closed on a flat note on Wednesday with the average yield across the curve closing flat at 7.81 percent. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 6.51 percent, 10.32 percent, and 7.22 percent, respectively.

In the Open Market Operation (OMO) bills secondary market, the average yield across the curve closed flat at 11.14 percent. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 11.40 percent, 10.46 percent, and 11.35 percent, respectively.

The Federal Government of Nigeria (FGN) bonds secondary market closed on a flat note on Wednesday, as the average bond yield across the curve closed flat at 13.16 percent. Average yields across medium tenor and long tenor of the curve remained unchanged. However, the average yield across the short tenor of the curve expanded by 3 bps.

The 23-MAR-2025 maturity bond was the best performer with a decrease in the yield of 2 bps, while the 14-MAR-2024 maturity bond was the worst performer with an increase in the yield of 7 bps. Furthermore, the secondary bond market is likely to remain subdued in the short term, said analysts at FSDH.