Nigeria’s currency on Friday lost 0.42 percent as the dollar closed at N472, breaking two weeks stability at N470 sold for since December 29, 2020 on the black market.
The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of Covid-19 pandemic.
Naira remained stable at the Bureau De Change (BDC) segment of the foreign exchange market as the dollar was sold at N470 since the beginning of the year.
At the Investors and Exporters (I&E) forex window, Naira strengthened by 0.04 percent as the dollar was quoted at N393.50 on Friday as against the last close of N393.67 on Thursday. Most FX market dealers, who participated in the transaction, maintained bids between N385.00 and N413.85 per dollar.
FX daily turnover rose significantly by 102.49 percent to $65.63 million on Friday from $32.41 million recorded on Thursday, data from FMDQ indicated.
The money market performance as shown in a report by the FSDH, revealed that the Nigerian treasury bills (NT-Bills) secondary market closed on a mildly positive note on Friday with average yield across the curve decreasing by 1 basis point to close at 0.42 percent from 0.43 percent on the previous day.
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The average yield across long-term maturities declined by 1 basis point, while average yields across short-term and medium-term maturities closed flat at 0.19 percent and 0.38 percent, respectively. Yields on 4 bills contracted with the 25-Nov-21 maturity bill recording the highest yield decrease of 5 bps, while yields on 15 bills remained unchanged.
The Overnight (O/N) rate increased by 8.58 percent to close at 9.33 percent on Friday as against the last close of 0.75 percent on Thursday, and the Open Buy Back (OBB) rate also increased by 7.63 percent to close at 8.00 percent from 0.37 percent on the previous day. The money market rates increased by an average of 811 bps, following the FX retail auction by the CBN.
In the OMO bills market, the average yield across the curve increased by 24 bps to close at 0.85 percent on Friday from 0.61 percent on the previous day.
Selling pressure was seen across long-term maturities with the average yield rising by 54 bps, while the average yield across medium-term maturities declined by 1 basis point. However, the average yield on short-term maturities closed flat at 0.25 percent. Yields on 12 bills advanced with the 30-Nov-21 maturity bill recording the highest yield increase of 84 bps, while yields on 7 bills remained unchanged.
The report noted that FGN bonds secondary market closed on a mildly negative note on Friday, as the average bond yield across the curve cleared higher by 1 basis point to close at 3.23 percent from 3.22 percent on the previous day. The average yield across the short tenor of the curve declined by 1 basis point, while average yield across medium tenor of the curve widened by 10 bps. However, the average yield across the long tenor of the curve remained unchanged.
The 22-JAN-2026 maturity bond was the best performer with a decrease in the yield of 9 bps, while the 23-FEB-2028 maturity bond was the worst performer with an increase in yield of 86 bps.
“Going into next week, trading volumes may remain relatively subdued in the secondary bond market as the DMO is likely to publish its 1st quarter auction calendar,” analysts said.
