Nigeria’s currency on Wednesday recovered after weakening against the dollar in the last four days at the Investors and Exporters (I&E) forex window due to shortage of the greenback.
After trading on Wednesday, naira gained 0.21 percent against the dollar to close at N411.13k compared to N412.00k on Tuesday, data from the FMDQ revealed.
Currency traders who participated in the trading on Wednesday maintained bids at between N390.00k and N415.00k/$.
The daily foreign exchange market turnover declined by 66.43 percent to $36.92 million on Wednesday from $110.01 million recorded on Tuesday.
Naira steadied at N484 and N480 per dollar at the black market and the Bureau De Change (BDC) segment of the foreign exchange market.
External reserves have declined by 4.95 percent to $34.71 billion as at March 9, 2021 from $36.52 billion stood in January 25, 2021, data from the Central Bank of Nigeria (CBN) show.
At the money market, the Nigerian Treasury Bills secondary market closed on a flat note on Wednesday, with the average yield across the curve remaining unchanged at 1.88 percent, according to a report by FSDH Research.
Average yields across short-term, medium-term, and long-term maturities closed at 0.53 percent, 1.38 percent, and 2.99 percent, respectively. At the Primary Market Auction held on Wednesday, the CBN offered NT-Bills worth N88.9 billion across 91-day (N4.4 billion), 182-day (N14.0 billion), and 364-day (N70.5 billion) tenors.
The Overnight (O/N) rate increased by 1.00 percent to close at 12.50 percent on Wednesday as against the last close of 11.50 percent on Tuesday, and the Open Buy Back (OBB) rate increased by 1.42 percent to close at 11.67 percent from 10.25 percent on the previous day.
“We expect the money market rates to remain at the current levels, 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 remained unchanged at 6.81 percent. Average yields across short-term, medium-term, and long-term maturities closed at 4.62 percent, 6.83 percent, and 7.90 percent, respectively.
The Bond market closed on a positive note on Wednesday, as the average bond yield across the curve cleared lower by 19 bps to close at 5.48 percent from 5.67 percent on the previous day. Average yields across short tenor, medium tenor, and long tenor of the curve decreased by 18 bps, 39 bps, and 1 basis point, respectively.
The 22-JAN-2026 maturity bond was the best performer with a decline in yield of 142 bps, while the 26-APR-2029 maturity bond was the worst performer with an increase in yield of 10 bps. As investors await the March bonds auction and Monetary Policy Committee (MPC) meeting results, the secondary bond market may witness an uptick in trading activities later in the week, the report stated.
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