Naira gains at official, steadies at N1,170 on black market

The pressure on the foreign exchange (FX) market eased on Tuesday and Wednesday as naira appreciated against the dollar at the official market but steadied at N1,170 on the parallel market.

The black market exchange rate remained the same on Wednesday after gaining 2.5 percent (N30) over the US dollars on Monday.

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After trading on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), naira strengthened by 17.96 percent as the dollar was quoted at N815.32, which was stronger than N993.82 quoted on Monday, according to the data obtained from the FMDQ.

This is despite low liquidity from the willing buyers and willing sellers in the market. The daily foreign exchange market turnover declined by 15.38 to close at $74.73 million on Tuesday from $88.31 million recorded on Monday.

At the money market, the Nigerian treasury bills (NT-Bills) secondary market closed on a flat note on Tuesday with the average yield across the curve closing flat at 10.29 percent. Average yields across short-term and long-term maturities remained unchanged at 7.04 percent and 12.96 percent, respectively. However, the average yield across the medium-term maturities declined by 1 basis point. NTB January 25, 2024 and NTB April 11, 2024 maturity bills witnessed mild buying interest with a yield decline of 1 basis point each, according to a report by FSDH Research.

The Overnight (O/N) rate increased by 0.52 percent to close at 16.46 percent as against the last close of 15.94 percent, and the Open Repo (OPR) rate increased by 0.28 percent to close at 15.58 percent compared to 15.30 percent on the previous day.

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The Open Market Operation (OMO) bills market closed on a mildly positive note on Tuesday, as the average yield across the curve cleared lower by 1 basis point to close at 12.01 percent from 12.02 percent on the previous day. The average yield across the long-term maturities declined by 1 basis point. OMO for August 6, 2024 (-1 basis point) maturity bill witnessed mild buying interest, the report stated.