FX market opens with naira trading at N745 to dollar

The foreign exchange (FX) market opened on Monday with naira trading at N745 per dollar at the parallel market, popularly known as black market.

This is the same rate it closed on Friday after losing 1.07 percent of its value within two days last week.

Naira which had steadied at N738/dollar at the beginning of last week, depreciated to N746/$ on Thursday, following increased demand for dollars by importers.

At the Investors and Exporters (I&E) forex window last week, activity level surged 137.4 percent week one-week (w/w) to $668.8 million.

In the official and parallel FX market, the naira weakened as the base currency (US$) gained 2bps and 108bps w/w respectively against the price currency (naira) to settle at N462.33/$1.00 and N743.00/$1, according to a report by Afrinvest Securities Limited.

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Brent crude oil price dipped 1.3 percent w/w to $74.33/bbl., as market sentiment remained negative despite OPEC revising global oil demand projection upwards for the year. Meanwhile, Nigeria’s foreign reserves dropped 15bps w/w to $35.2bn.

The Nigerian Treasury Bills (NT-Bills) secondary market closed the previous week on a bullish note, supported by a buoyant system liquidity (which stood at N721.53bn long as of Thursday, May 11, 2023). As a result, average yield dipped by 112bps to close at 6.39 percent from 7.51 percent recorded in the past week.

A report by Afrinvest noted that buying interest was witnessed at all ends of the curve, evident in the September 17, 2023, November 23, 2023 and March 14, 2024 instruments as yield dipped by 86bps, 238bps and 286bps respectively.

On Wednesday, last week, the Apex bank rolled over a total of N143.98bn across the 90- day, 182- day and 364-day tenors, stop rates were 4.5 percent, 6.44 percent, and 8.99 percent respectively.

“This week, given the robust system liquidity, we expect a sustained bullish run. Thus, we advise investors to trade cautiously and take advantage of relatively attractive bills across the curve,” analysts at Afrinvest securities said.

At the Primary Market Auction (PMA), the Debt Management office (DMO) will be offering N360.00bn across the February 2028, April 2032, January 2042, and March 2050 maturities.