Nigeria’s currency on Tuesday weakened against the dollar at the Investors and Exporters (I&E) due to liquidity shortfalls.
After trading on Tuesday, Naira lost 0.24 percent to the dollar, which was quoted at N411.00k compared to N410.00k quoted on Friday before the workers holiday declared by the Federal Government on Monday.
Currency traders who participated in the trading on Tuesday maintained bids at between N395.00k and N422.00k/$, data from the FMDQ indicated.
The daily foreign exchange market turnover declined by 25.03 percent to $42.59 million on Tuesday from $56.81 million recorded on Friday.
Exchange rate remained flat at N482 at the Bureau De Change (BDC) segment of the foreign exchange market and N485 at the parallel market.
At the money market, analysts expect to see more demand in the Nigerian treasury bills secondary market given strengthened liquidity levels of N208.4bn as at Friday, 30th April, 2021, and as investors try to place unmet bids from last week’s Primary Market Auction (PMA).
“We advise investors to continue to position in relatively attractive bills across the curve while also remaining alert for possible corporate offerings,” analysts at Afrinvest Securities Limited said.
At last Wednesday’s PMA, the Central Bank of Nigeria (CBN) rolled over a total of N88.0bn across the 91-, 182-, and 364-Day tenors, which was met with strong demand, recording a total subscription of N242.9bn.
In addition, the Apex bank sold less than it offered on the 91-Day tenor which had a 1.5x bid-to-cover ratio while most demand was recorded on the 364-day tenor with a 1.9x bid-to-cover ratio. Furthermore, stop rates were maintained at the short- and medium-term offers, while the long-term offer expanded to 9.75% (from 9.0% at the last auction).
A report by FSDH Research showed that the Overnight (O/N) rate decreased by 12.25 percent to close at 15.50 percent as against the last close of 27.75 percent, and the Open Buy Back (OBB) rate decreased by 13.00 percent to close at 14.50 percent from 27.50 percent on the previous day.
“Going into this week, the money rates are expected to trend in the double-digits due to lower system liquidity, inspite of the Open Market Operation (OMO) repayment of N30.00 billion,” analysts at FSDH said.
