Nigeria’s currency on Monday strengthened against dollar by 0.26 percent at the Investors and Exporters (I&E) forex window after the Central Bank of Nigeria (CBN) admitted that Naira has devalued for the third time.
“In order to adjust for the decrease in supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$,” Godwin Emefiele, governor of the CBN said Friday.
However this is yet to be reflected on the CBN’s website and the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) window.
After trading on Monday, Naira closed at N409.20k per dollar as against N410.25k closed on Friday. Currency traders who participated in the trading on Monday maintained bids at between N381.00k and N415.00k/$, according to data from the FMDQ.
The daily foreign exchange market declined by 34.97 percent to $24.38 million on Monday from $37.49 million closed on Friday.
The local currency steadied at N482 and N480 to the dollar at parallel market and Bureau De Change (BDC) segment of the market.
Nigeria’s external reserves have declined to $35.17 billion as at February 24, 2021 according to the data on the CBN website.
The price of oil has improved as the price of Brent Crude, which fell below $20 per barrel last year has risen to $64.29 per barrel as at 6.59pm on Monday.
At money market, the Nigeria treasury bills secondary market closed on a flat note on Monday, with the average yield across the curve remaining unchanged at 1.49 percent, a report by FSDH research stated.
Average yields across short-term, medium-term, and long-term maturities closed at 0.57 percent, 1.48 percent, and 2.01 percent, respectively.
The Overnight (O/N) rate increased by 0.42 percent to close at 6.75 percent as against the last close of 6.33 percent, and the Open Buy Back (OBB) rate increased by 0.33 percent to close at 6.00 percent from 5.67 percent on the previous day.
“We expect money market rates to remain subdued in the absence of funding obligations, barring any mop-up activity by the CBN,” analysts at FSDH said.
In the Open Market Operation (OMO) bills market, the average yield across the curve increased by 6 bps to close at 6.15 percent as against the last close of 6.09 percent.
Selling pressure was seen across long-term maturities with average yields expanding by 9 bps, while the average yields on short-term and medium-term maturities closed flat at 3.30 percent and 5.07 percent, respectively. Maximum selling pressure was witnessed in the OMO 25-Jan-22 (+75 bps) and OMO 18-Jan-22 (+37 bps) maturity bills, while yields on 15 bills remained unchanged.
