Nigeria’s currency on Monday weakened against the dollar by 0.21 percent to close at N411.67k/$ compared to N410.80k/$ closed on Friday, at the Investor and Exporters (I&E) forex window.
Traders attributed the naira depreciation to increased demand for the dollar by the end-users. The Central Bank of Nigeria (CBN) promised to increase dollar supply to banks after it stopped dollar sales to the Bureau De Change (BDCs).
The CBN supplies dollars weekly at the inter-bank market. The apex bank increased dollar sales to banks by over 200 percent, in fulfillment of its promise made on July 27, 2021.
Currency traders who participated in the trading session on Monday maintained bids at between N400.00k and N412.50k per dollar.
At the parallel market, also known as the black market, naira steadied at N515 per dollar. Naira fell sharply to N525 to the dollar on July 28 after the CBN announced that it would discontinue the sale of dollars to the BDC operators due to foreign exchange contraventions.
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At the money market, the Nigerian Treasury Bills (NT-Bills) secondary market closed on a negative note on Monday with average yield across the curve increasing by 23 bps to close at 4.90 percent from 4.67 percent on the previous day, according to a report by the FSDH research.
The Overnight (O/N) rate increased by 0.25 percent to close at 17.50 percent as against the last close of 17.25 percent, and the Open Buy Back (OBB) rate also increased by 0.25 percent to close at 17.00 percent compared to 16.75 percent on the previous day.
Average yields across short-term, medium-term, and long-term maturities expanded by 45 bps, 16 bps, and 10 bps, respectively. Yields on 17 bills advanced with the 11-Nov-21 maturity bill recording the highest yield increase of 124 bps, while yields on 2 bills remained unchanged.
In the Open Market Operation (OMO) bills market, the average yield across the curve remained unchanged at 7.65 percent. Average yields across short-term, medium-term, and long-term maturities closed flat at 7.33 percent, 7.60 percent, and 8.32 percent, respectively.
The Federal Government of Nigeria (FGN) bonds secondary market closed on a negative note Monday, as the average bond yield across the curve cleared higher by 12 bps to close at 8.85 percent from 8.73 percent on Friday. The average yield across the short tenor of the curve increased by 15 bps. However, the average yields across medium tenor and long tenor of the curve remained unchanged.
