• Tuesday, July 16, 2024
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Naira reverses loss, strengthens by 0.42% on black market

Dollar-naira

Nigeria’s currency on Wednesday appreciated by 0.42 percent to N478 per dollar after weakening to N480/$ on Tuesday at the black market.

Traders said there was moderation in demand for dollar amid short supply of the greenback. The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of Covid-19 pandemic.

The local currency steadied N475 per dollar at the Bureau De Change (BDC) segment of the foreign exchange on Wednesday.

At the Investors and Exporters (I&E) forex window, Naira depreciated by 0.06 percent as the dollar was quoted at N394.25 as against the last close of N394.00. Analysts at the FSDH research noted that most participants maintained bids between N390.00 and N396.00 per dollar.

The daily foreign exchange turnover declined by 52.45 percent to $51.51 million on Wednesday from $108.34 million recorded on Tuesday, data from the FMDQ indicated.

At the money market on Wednesday, the Central Bank of Nigeria (CBN) offered treasury Bills worth N187.3 billion across 91-day (N7.5 billion), 182-day (N54.6 billion), and 364-day (N125.2 billion) tenors, at the Primary Market Auction (PMA).

The Nigerian treasury Bills secondary market closed on a flat note on Wednesday, with the average yield across the curve remaining unchanged at 0.58 percent. Average yields across short-term, medium-term, and long-term maturities closed at 0.23 percent, 0.49 percent, and 0.83 percent, respectively.

The Overnight (O/N) rate increased by 0.25 percent to close at 5.50 percent on Wednesday as against the last close of 5.25 percent, and the Open Buy Back (OBB) rate also increased by 0.50 percent to close at 5.00 percent from 4.50 percent on the previous day.

“Money market rates are likely to remain steady at 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 increased by 24 bps to close at 1.58 percent on Wednesday from 1.34 percent on the previous day. Selling pressure was seen across short-term, medium-term, and long-term maturities with average yields increasing by 8 bps, 62 bps, and 25 bps, respectively. Yields on 16 bills advanced with the 8-Jun-21 maturity bill recording the highest yield increase of 73 bps, while yields on 6 bills remained unchanged.