Nigeria’s currency was stable on Thursday as the dollar traded at N460 and N459 on the black market and Bureau De Change (BDC) segment of the foreign exchange market.
Traders said on Thursday that demands for dollar was moderate while supply improved. The BDC operators numbering about 5,000 received allocation from the Central Bank of Nigeria (CBN) on Thursday.
The foreign exchange daily turnover at the Investors and Exporters (I&E) forex window, increased significantly by 463.39 percent to $166.37 million on Thursday from $29.53 million recorded on Wednesday, data from the FMDQ indicated.
At the I&E window, Naira appreciated by 0.04 percent as the dollar was quoted at N385.67 as against the last close of N385.83 on Wednesday. Analysts at FSDH research said most participants maintained bids between N380.00 and N386.00 per dollar.
Traders see the local currency stable next week as lenders limit forex transcations by both firms and individual buyers on the black market to curb speculation.
The CBN has employed several methods to help support the naira in the wake of sharp decline in the price of oil, the country’s main export. The apex bank has tried to curb import demand to spur local production in addition to rationing dollar supply, Reuters report.
At the money market on Thursday, the Nigeria treasury bills market closed on a positive note with average yield across the curve declining by 32 bps to close at 1.12 percent from 1.44 percent on the previous day. Average yields across short-term, medium-term, and long-term maturities compressed by 36 bps, 46 bps, and 24 bps, respectively. At the Primary Market Auction held on October 14, the CBN sold NT-Bills worth N124.88 billion across the 91-day (N12.76 billion), 182-day (N4.50 billion), and 364-day (N107.62 billion) tenors.
The stop rates for 182-day and 364-day tenors cleared significantly lower at 1.00 percent (-49 bps) and 2.00 percent (-80 bps), respectively, while the stop rate for 91-day tenor moderated slightly by 8 bps to 1.00 percent. The auction was oversubscribed considerably by 489 percent with bid-to-cover ratios settling at 3.73x (91-day), 12.78x (182-day), 5.84x (364-day). Despite a high level of subscriptions across three tenors supported by abundant liquidity in the market, the CBN sold only 20.20 percent of the total demand of N618.09 billion.
The Overnight (O/N) rate declined by 0.46 percent to close at 2.17 percent on October 15, from 2.63 percent on the previous day, and the Open Buy Back (OBB) rate also declined by 0.42 percent to close at 1.33 percent as against the last close of 1.75 percent.
