The foreign exchange pressure intensified on Thursday as the naira weakened to N520, losing 0.58 percent compared to N517/$ traded on Wednesday at the parallel market, also known as the black market.
Trade attributed the naira depreciation to increased demand for the greenback by the end-users who could not get dollars from the bank due to the documentation process.
On Wednesday naira depreciated by 0.39 against the dollar after steadying at N515/$ for the past one week.
The local currency fell sharply to N525 to the dollar on July 28 after the Central Bank of Nigeria (CBN) announced that it would discontinue the sale of dollars to the Bureau De Change (BDC) operators due to foreign exchange contraventions.
Read also: Naira falls to N517 per dollar after one week
At the Investors and Exporters (I&E) forex window, Naira appreciated by 0.02 percent as the dollar was quoted at N411.67 against the last close of N411.75/$ on Wednesday.
Currency traders who participated in the trading session on Wednesday maintained bids between N400.00k and N413.00k per dollar.
At the money market, the Nigerian treasury bills secondary market closed on a flat note, with the average yield across the curve remaining unchanged at 4.58 percent on Thursday, according to a report by the FSDH research.
Average yields across short-term, medium-term, and long-term maturities closed flat at 3.33 percent, 4.30 percent and 5.57 percent, respectively.
The Overnight (O/N) rate increased by 0.46 percent to close at 18.33 percent on Thursday as against the last close of 17.87 percent on Wednesday, and the Open Buy Back (OBB) rate also increased by 0.17 percent to close at 17.67 percent compared to 17.50 percent on the previous day.
In the Open Market Operation (OMO) bills market, the average yield across the curve decreased by 162 bps to close at 5.95 percent as against the last close of 7.67 percent. Heavy buying interest was seen across short-term, medium-term, and long-term maturities with the average yields falling by 176 bps, 133 bps, and 185 bps, respectively. Yields on 21 bills compressed with the 31-Aug-21 maturity bill recording the highest yield decrease of 227 bps.
At the bond market, the FGN Bond Auction for August 2021 was oversubscribed by 140 percent (N360.02 billion) as the auction witnessed healthy demand across all the tenors with bid-to-cover ratios settling at 1.55x (10-year), 2.10x (20-year), and 3.55x (30-year).
The Debt Management Office (DMO) raised bonds worth N260.09 billion (73.39 percent more than the amount offered) across the 10-year (N64.25 billion), 20-year (N91.03 billion), and 30-year (N104.81 billion) tenors at marginal rates of 11.60 percent (-75 bps), 12.75 percent (-40 bps), and 12.80 percent (-45 bps), respectively.
