The foreign exchange pressure continued on Thursday as Nigeria’s currency weakened further to N495 on the black market due to speculative activities of the operators.
With the closing rate on Thursday, naira was 0.40 percent lower than N493 per dollar closed on the previous day on the parallel market.
Naira also depreciated at the Bureau De Change (BDC) segment by 1.03 percent as the dollar sold for N490 on Thursday compared to N485 traded on Wednesday.
The Naira depreciation followed the adoption of N410.25k as official rate by the Central Bank of Nigeria (CBN). The new official rate shows a 8.24 percent devaluation from N379/$ previously. It also shows a N72.75k spread from parallel market rate of about N483 per dollar.
However, at the Investors and Exporters (I&E) forex window, naira strengthened by 0.12 percent as the dollar was quoted at N411.00k on Thursday as against N411.50k on Wednesday, data from the FMDQ showed.
Currency traders who participated in the trading exercise on Thursday maintained bids at between N387.67k and N429.37k/$, according to the data.
The foreign exchange daily turnover rose significantly by 261.57 percent to $471.85 million on Wednesday from $130.50 million recorded on Tuesday.
At the money market on Thursday, the Nigerian Treasury Bills secondary market closed on a negative note with average yield across the curve increasing by 23 bps to close at 6.10 percent from 5.87 percent on the previous day, according to a report by FSDH Research.
Consequently, average yield across short-term, medium-term, and long-term maturities widened by 72 bps, 2 bps, and 10 bps, respectively. Yields on 8 bills advanced with the 10-Jun-21 maturity bill recording the highest yield increase of 101 bps, while yields on 10 bills remained unchanged.
The CBN held its scheduled Primary Market Auction on May 26, selling NT-Bills worth N151.13 billion across the 91-day (N3.12 billion), 182-day (N4.12 billion), and 364-day (N143.89 billion) tenors. The stop rates for the 91-day and 182-day tenors remained unchanged at 2.50 percent and 3.50 percent, respectively.
However, the stop rate for the 364-day tenor cleared lower at 9.65 percent (-10 bps). The auction was oversubscribed by 369 percent, with bid-to-cover ratios settling at 0.18x (91-day), 0.29x (182-day), and 14.44x (364-day).
In the Open Market Operation (OMO) bills market, the average yield across the curve decreased by 2 bps to close at 9.72 percent on Thursday as against the last close of 9.74 percent on Wednesday. Buying interest was seen across short-term maturities with average yield compressing by 41 bps, while selling pressure was seen on medium-term maturities with the average yield rising by 15 bps. However, the average yield on long-term maturities closed flat at 10.14 percent. Yields on 10 bills declined with the 8-Jun-21 maturity bill recording the highest yield decrease of 108 bps, while yields on 11 bills remained unchanged.
The Nigerian Bond market closed on a negative note on Thursday, as the average bond yield across the curve cleared higher by 18 bps to close at 10.02 percent from 9.84 percent on the previous day. Average yield across the short tenor of the curve expanded by 24 bps, while the average yield across the long tenor declined by 2 bps. However, the average yield across the medium tenor of the curve remained unchanged.
The 26-APR-2049 maturity bond was the best performer with a decline in yield of 16 bps, while the FGNSB 13-JUN-2021 bond was the worst performer with an increase in yield of 100 bps.
“We expect that the secondary bond market activities are likely to remain subdued in the short term,” analysts at FSDH Research said.
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