Naira reverse gain to close at N500 on black market

Nigeria’s currency on Monday reversed the gains made last weekend as the naira/dollar exchange rate closed at N500 representing 0.40 percent compared to N498 closed on Friday at the parallel market.

The naira depreciation was due to the activities of speculators, following the naira adjustment to N410.25k/$ by the Central Bank of Nigeria (CBN).

Also at the Bureau De Change (BDC), naira also weakened by 1.03 percent to close at N490 per dollar on Monday as against N485 closed on Friday.

About 5,000 BDC operators across the country funded their accounts in anticipation for dollar disbursement by the CBN on Tuesday. The Apex bank sells $10,000 twice weekly to each BDC.

The local currency lost 0.16 percent to close at N411.67k from N411.00k on Friday at the Investors and Exporters (I&E) forex window.

Currency traders who participated at the trading session on Monday maintained bids at between N400.00k and N420.88k per dollar.

At the money market, the Nigerian Treasury Bills secondary market closed on a flat note on Monday, with the average yield across the curve remained flat at 6.35 percent, a report from the FSDH Research stated. Average yields across short-term and medium-term maturities closed flat at 4.00 percent and 5.56 percent, respectively. However, the average yield across the long-term maturities declined by 1 bps.

The Overnight (O/N) rate decreased by 0.25 percent to close at 19.00 percent as against the last close of 19.25 percent, and the Open Buy Back (OBB) rate also decreased by 0.25 percent to close at 18.50 percent compared to 18.75 percent on the previous day.

“Money market rates are likely to remain in double digits as outflows from the bond auction and retail FX intervention will more than offset the expected Federation Account Allocation Committee (FAAC) credit and Open Market Operation (OMO) repayments,” analysts at FSDH said.

In the OMO bills market, the average yield across the curve decreased by 1 basis point to close at 9.65 percent as against the last close of 9.66 percent. Mild buying interest was seen across short-term, medium-term, long-term maturities with the average yields falling by 1 basis point each. Yields on 21 bills compressed by 1 basis point each except for the OMO 22-Feb-22 maturity bill, which recorded a yield increase of 3 bps.