• Thursday, March 28, 2024
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BusinessDay

Naira maintains stability across markets as liquidity improves

Foreign Exchange

Nigeria’s currency closed flat across various market segments on Monday as demand for dollars moderated amid improved liquidity.

The foreign exchange daily turnover increased by 48.23 percent to $47.45 million on Monday from $32.01 million recorded on Friday at the Investors and Exporters (I&E) forex window.

Consequently, the naira/dollar exchange rate steadied at N410.00k, the rate it stood since Wednesday last week at the I&E window, data from the FMDQ indicated.

Currency traders who participated in the trading on Monday maintained bids at between N402.00k and N436.55k/$, according to the data.

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, the Nigerian Treasury Bills secondary market closed on a flat note on Monday, with the average yield across the curve remaining unchanged at 4.74 percent, according to a report by FSDH Research.

Average yields across short-term, medium-term, and long-term maturities closed at 2.92 percent, 3.41 percent, and 6.32 percent, respectively.

The Overnight (O/N) rate decreased by 2.50 percent to close at 14.25 percent on Monday as against the last close of 16.75 percent on Friday, and the Open Buy Back (OBB) rate also decreased by 2.13 percent to close at 13.75 percent on Monday from 15.88 percent on the previous day. Money market rates are expected to trend in the double digits due to low system liquidity.

In the Open Market Operation (OMO) bills market, the average yield across the curve declined by 1 basis point to close at 7.72 percent as against the last close of 7.73 percent. Mild buying interest was seen across long-term maturities with the average yield falling by 1 basis point.

However, the average yields on short-term and medium-term maturities closed flat at 4.32 percent and 6.82 percent, respectively. Yields on 17 bills compressed, while yields on 11 bills remained unchanged.

According to the report, FGN bonds secondary market closed on a mildly positive note on Monday, as the average bond yield across the curve cleared lower by 1 basis point to close at 8.23 percent from 8.24 percent on the previous day.

Average yields across short tenor and medium tenor of the curve compressed by 1 basis point and 6 bps, respectively. However, the average yields across the long tenor of the curve expanded by 7 bps. The 26-APR-2029 maturity bond was the best performer with a decrease in the yield of 15 bps, while the 27-MAR-2035 maturity bond was the worst performer with an increase in the yield of 30 bps.