The value of Nigeria’s currency dropped by N1.50k as the dollar traded at an average rate of N459.50k on Wednesday from N458 on Tuesday on the black market.
Naira depreciation was attributed to dollar shortages in spite of the twice weekly supply of the greenback to the Bureau De Change (BDC) operators by the Central Bank of Nigeria (CBN).
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.
Investigation across the streets of Lagos where black market operators transact business shows that dollar was sold at N459 at the Lagos Airport and Apapa while it traded at N460 in Festac town and Eko Hotel.
Naira remained stable as the dollar sold for N459 at the BDC segment of the foreign exchange market on Wednesday.
The BDCs are expected to receive the second tranche of the dollar disbursement for the week from the CBN on Thursday.
At the Investors and Exporters (I&E) forex window, Naira appreciated by 0.04 percent as the dollar was quoted at N385.83k as against the last close of N386.00k. Analysts at FSDH research said participants maintained bids between N384.00k and N392.78k per dollar.
The foreign exchange daily turnover declined further by 62.87 percent to $29.53 million on Wednesday from $79.53 million on Tuesday, data from FMDQ indicated.
At the money market on Wednesday, the Nigerian treasury bills secondary market closed on a negative note with average yield across the curve increasing by 6 bps to close at 1.44 percent from 1.38 percent on the previous day, a report by FSDH research stated.
The average yield across long-term maturities widened by 13 bps, due to the maximum selling pressure witnessed in the NTB 13-May-21 (+42 bps), NTB 29-Apr-21 (+33 bps), and NTB 10-Jun-21 (+22 bps) maturity bills.
However, average yields across short-term and medium-term maturities remained unchanged at 1.00 percent and 1.11 percent, respectively.
At the Primary Market Auction held on Wednesday, the CBN offered NT-Bills worth N104.88 billion across the 91-day (N8.85 billion), 182-day (N3.50 billion), and 364-day (N92.53 billion) tenors. The system liquidity is expected to remain buoyant due to inflows from Thursday’s Open Market Operation (OMO) bills and NT-Bills maturities worth N370.0 billion and N104.9 billion, respectively.
In the OMO bills market, the average yield across the curve remained unchanged at 1.36 percent on Wednesday. In spite of an excess system liquidly in the market, the OMO bills market was quiet as compared to yesterday’s trading session.
