• Monday, July 22, 2024
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Naira records 0.98% loss against dollar as demand rises


Nigeria’s currency on Wednesday weakened by 0.98 percent against the dollar as demand increased at the parallel market, popularly called black market.

After trading on Wednesday, the naira/dollar exchange rate closed at N515/$ as against N510 closed on the previous day.

Black market operators who operate on the streets buy from and sell to individuals without documentation.

Read Also: External reserves decline by $150.81m as CBN defends naira

Naira fell sharply to N525 to the dollar on July 28 after the Central Bank of Nigeria (CBN) announced that it would discontinue the sale of dollars to the Bureau De Change (BDC) operators due to foreign exchange contraventions.

Read Also: Naira records marginal appreciation as turnover rise by 138.04%

Naira gained marginally by 0.02 percent as the dollar closed at N411.40 on Wednesday compared with N411.50 quoted on Tuesday at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

Currency traders who participated at the trading session on Wednesday maintained bids at between N400.00k and N412.50k per dollar.

At the money market on Wednesday, the Nigerian Treasury Bills secondary market closed on a mildly positive note with average yield across the curve decreasing by 2 bps to close at 5.54 percent from 5.56 percent on the previous day, according to a report by FSDH research.

Read Also: Naira records marginal depreciation on low liquidity

Average yields across medium-term and long-term maturities fell by 6 bps and 2 bps, respectively. However, the average yield across the short-term maturities closed flat at 3.16 percent. Yields on 11 bills compressed with the 25-Nov-21 maturity bill recording the highest yield decrease of 8 bps, while yields on 10 bills remained unchanged. At the Primary Market Auction held on Wednesday, the Central Bank of Nigeria (CBN) offered NT-Bills worth N51.50 billion across 91-day (N8.44 billion), 182-day (N16.06 billion), and 364-day (N27.00 billion) tenors.

Read Also: One dollar now sells at N495 on black market

The Overnight (O/N) rate increased by 4.00 percent to close at 17.50 percent on Wednesday as against the last close of 13.50 percent on Tuesday, and the Open Buy Back (OBB) rate also increased by 4.00 percent to close at 17.00 percent compared to 13.00 percent on the previous day.

The average yield across the curve in the Open Market Operation (OMO) bills market remained unchanged at 7.71 percent on Wednesday. Average yields across short-term, medium-term, and long-term maturities closed flat at 7.34 percent, 7.60 percent, and 8.43 percent, respectively.

At the Bonds market, the Federal Government of Nigeria (FGN) bonds secondary market closed on a positive note on Wednesday, as the average bond yield across the curve cleared lower by 10 bps to close at 8.90 percent from 9.00 percent on the previous day. Average yields across the short tenor, medium tenor, and long tenor of the curve declined by 8 bps, 21 bps, and 11 bps, respectively. The 24-JUL-2045 maturity bond was the best performer with a decline in yield of 40 bps.