Naira gains as market turnover rises by 134.63%

Nigeria’s currency on Tuesday gained 0.34 percent to close at N408.60k per dollar compared to N410.00k closed since two days at the Investors and Exporters (I&E) forex window, thanks to improved liquidity.

The Naira appreciation was attributed to increased liquidity as the daily foreign exchange market turnover rose significantly by 134.63 percent to $123.37 million on Tuesday from $52.58 million recorded on Monday, data from the FMDQ indicated.

Currency traders who participated in the trading on Tuesday maintained bids at between N38.75k and N429.75k/$.

Naira weakened by N1.00k as the dollar closed at N478 on Tuesday as against N477 closed on the previous day at the Bureau De Change (BDC) segment of the foreign exchange market. At the parallel market, the local currency steadied at M480 per dollar.

Money market rates decreased by an average of 1325 bps following Open Market Operation (OMO) maturities of N423.79 billion, a report by FSDH research stated.

Consequently, the Overnight (O/N) rate decreased by 13.25 percent to close at 2.00 percent as against the last close of 15.25 percent, and the Open Buy Back (OBB) rate also decreased by 13.25 percent to close at 1.75 percent from 15.00 percent on the previous day.

The Nigerian treasury bills secondary market closed on a flat note on Tuesday, with the average yield across the curve remaining unchanged at 1.48 percent. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 0.57 percent, 1.34 percent, and 2.00 percent, respectively.

The CBN will on Wednesday conduct a Primary Market Auction to roll over NT-bills maturities worth N128.22 billion across 91-day (N20.37 billion), 182-day (N55.85 billion), and 364-day (N52.00 billion) tenors.

In the OMO bills market, the average yield across the curve decreased by 20 bps to close at 6.17 percent as against the last close of 6.37 percent. Buying interest was seen across short-term, medium-term, and long-term maturities with the average yields falling by 39 bps, 18 bps, and 10 bps, respectively. Yields on 12 bills declined with the 30-Mar-21 maturity bill registering the highest yield decrease of 124 bps, while yields on 9 bills remained unchanged.

FGN bonds secondary market closed on a flat note today, as the average bond yield across the curve remained unchanged at 5.32 percent. Average yields across the medium tenor and long tenor of the curve compressed by 2 bps each, while the average yield across the short tenor of the curve remained unchanged.

The 24-JUL-2045 maturity bond was the best performer with a decline in yield of 16 bps, while the 27-MAR-2050 maturity bond was the worst performer with an increase in yield of 4 bps.

“With the improved system liquidity, the secondary bond market may witness higher demand later in the week” ,the analysts said.