Nigeria’s currency on Monday fell back to N480 per dollar after gaining N5.00k in the last 10 days from N473 as at February 10, 2021 on the black market.
On day-on-day basis, naira weakened by 0.42 percent from N478, which the dollar traded on Friday. Naira also depreciated by N1.00k to close at N477 per dollar on Monday as against N476 on Friday, at the Bureau De Change (BDC) segment of foreign exchange market.
Strong dollar demand by end users amid shortage was the reason for the drop in the value of the naira. The shortage of dollars was due to sharp drop in the price of oil occasioned by covid-19 pandemic.
However, the price of oil has improved as the price of Brent Crude, which fell below $20 per barrel last year has risen to $64.66 per barrel as at 6.40pm on Monday.
At the Investors and Exporters (I&E) forex window, naira steadied at N410.00k after trading on Monday. . Foreign exchange dealer who participated during the intraday trading maintained bids at between N389.75k and N412.00k.
The market opened with the local currency depreciating by 0.11 percent to N408.04k on Monday from N407.61k opened with on Friday, data from the FMDQ indicated.
The foreign exchange daily market turnover declined by 20.83 percent to $52.58 million on Monday from $66.41 million recorded on Friday.
Over 5,000 BDC operators funded their accounts on Monday in anticipation for dollar disbursement from the Central Bank of Nigeria (CBN) on Tuesday.
At the fixed income market, the Nigeria treasury bills secondary market closed on a mildly positive note on Monday with average yield across the curve decreasing by 3 bps to close at 1.48 percent from 1.51 percent on the previous day, according to a report by FSDH Research. Average yield across medium-term maturities declined by 11 bps, while the average yields across short-term and long-term maturities closed flat at 0.57 percent and 2.00 percent, respectively. Buying interest was witnessed in the 29-Jul-21 maturity bill (-51 bps) and 26-Aug-21 maturity bill (-4 bps), while yields on 16 bills remained unchanged.
In the Open Market Operation (OMO) bills market, the average yield across the curve increased by 1 basis point to close at 6.37 percent as against the last close of 6.36 percent. Selling pressure was seen across short-term and medium-term maturities with the average yields rising by 2 bps each, while the average yield across long-term maturities closed flat at 7.87 percent. Yields on 4 bills advanced with the 25-May-21 maturity bill registering the highest yield increase of 5 bps, while yields on 12 bills remained unchanged.
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