• Saturday, May 25, 2024
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External reserves decline by $69.11m as naira remains stable

Foreign Exchange

Nigeria’s foreign exchange reserves recorded its first weekly decline since last five weeks, falling by $69.11 million week-on-week to $35.75 billion as of September 25, 2020.

This is in spite of gradual improvement in the price of crude oil to $42.23 per barrel from as low as $20 per barrel early this year, due to Covid-19 pandemic. Crude oil is Nigeria’s main source of foreign exchange, contributes over 90 percent.

Naira remained stable as the dollar was quoted at N386.00 per dollar, at the Investors and Exporters (I&E) forex window. Analysts at FSDH research said most participants maintained bids between N383.00 and N391.37 per dollar.

The market opened with an indicative rate of N386.25k, the same rate it opened on Friday at the I&E window.

The daily foreign exchange turnover rose by 56.54 percent to $133.73 million on Monday from $85.43 million recorded on Friday.

Nigeria’s currency on Monday maintained stability as the dollar was traded at N466 and N465 on the black market and Bureau De Change (BDC) segment of the foreign exchange market.

At the money market on Monday, the Nigerian treasury bills (NT-Bills) market closed on a negative note with average yield across the curve increasing by 2 bps to close at 1.82 percent from 1.80 percent on the previous day, a report by FSDH indicated.

The average yield across medium-term maturities widened by 6 bps, while average yields across short-term and long-term maturities remained unchanged. The highest yield increase was witnessed in the NTB 29-Jul-21 maturity bill, which rose by 23 bps, while the highest yield decline was seen in the NTB 16-Sep-21 maturity bill, which fell by 69 bps.

The analysts expect the investors focus to be shifted to the Primary Market Auction, which is scheduled on September 30, where the CBN will rollover NT-Bills maturities worth N113.97 billion.

In the Open Market Operation (OMO) bills market, the average yield across the curve declined by 50 bps to close at 1.87 percent against the last close of 2.37 percent. Buying interest was seen across medium-term and long-term maturities with average yields falling by 8 bps and 201 bps, respectively.

However, the average yield across the short-term maturities remained unchanged at 1.59 percent. Yields on 4 bills declined with the 24-Aug-21 maturity bill registering the highest yield decline of 717 bps, while yields on 2 bills advanced with the 10-Aug-21 maturity bill recording the highest yield increase of 21 bps.