The foreign exchange market on Monday maintained calmness as Nigeria’s currency closed unchanged across market segments.
Naira opened on Monday with a N2 to N508 per dollar during the morning trading but later closed at N510/$, the same rate closed on Friday at the parallel market, also known as black market.
However, the financial market will be awash with liquidity as inflows worth N137.5 billion is expected to hit the market this week.
A breakdown of the inflows showed that N80.0 billion will be maturing from Open Market Operation (OMO) bills while N57.5 billion will be rolled over by the Central Bank of Nigeria (CBN) at the Primary Market Auction (PMA) on Wednesday (11-Aug-21) across the 91-, 182-, and 364-Day tenors.
The expected inflows will improve the system liquidity put at N325.6 billion long as at Friday), according to a report by Afrinvest Securities Limited.
“We expect active participation in the NT-Bills market as investors position for the mid-week auction. Thus, we advise investors to take advantage of the attractive yields and available commercial paper offer,” said analysts at Afrinvest.
Last week, the Nigerian Treasury Bills (NT-Bills) secondary market witnessed an improvement in activity levels on the back of stable liquidity levels (which stood at N285.4 billion long as of Monday, 02-Aug-21 as average yield across all tenors fell 27bps W-o-W to close at 5.62 percent from 5.90 percent the previous week.
In more detail, the average yield in the short-, medium- and long-end of the curve shed 9bps, 22bps, and 39bps Week-on-Week respectively as yields dipped across all tenors save for the 25-Nov-21 instrument which advanced 35bps W-o-W.
The FGN Bond secondary market sustained its bullish run as average yield across the curve declined 13bps to close at 11.94 percent (from 12.07% the previous week).
Specifically, the most buying interest was seen in the short- to medium-end of the curve as average yield shed 11bps and 22bps W-o-W to close at 9.92 percent and 12.32 percent respectively while average yield at the long-end of the curve marginally maintained its bullish run, shedding only 5bps to stop at 13.00 percent from 13.05 percent the previous week.
“We expect that activity levels will remain stable in the secondary market as investors gradually position in relatively attractive maturities in light of improved yields,” the analysts said.