The value of naira, which reflects the cost of one dollar, has steadied at N765 since the beginning of this week as demand slows across foreign exchange markets.
After trading on Thursday dollar closed at the rate of N765, stronger than N775 closed on Friday last week, at the parallel market, popularly called the black market.
“The rate is not going up or down. It is stable because there is no demand. The cash crunch is affecting our business,” one trader told BusinessDay.
Naira appreciated marginally at the Investors and Exporters (I&E) forex window, gaining 0.06 percent against the dollar.
The dollar was quoted at N461.33 on Thursday as against the last close of N461.60 on Wednesday at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX).
Most currency dealers who participated at the foreign exchange auction on Thursday maintained bids between N446.00 (low) and N462.01 (high) per dollar, data from the FMDQ indicated.
The foreign exchange market daily turnover increased by 56.22 percent to $110.27 million on Thursday from $48.28 million recorded on Tuesday.
At the money market on Thursday, the Overnight (O/N) rate decreased by 1.75 percent to close at 10.81 percent as against the last close of 12.56 percent, and the Open Repo (OPR) rate decreased by 1.38 percent to close at 10.50 percent compared to 11.88 percent on the previous day.
The Nigerian treasury bills secondary market closed on a flat note on Thursday with the average yield across the curve closing flat at 4.30 percent, according to a report by FSDH research. Average yields across short-term, medium-term, and long-term maturities closed flat at 4.31 percent, 4.17 percent, and 4.32 percent, respectively.
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Moreover, the CBN held a scheduled Primary Market Auction on February 22, selling NT-Bills worth N263.50 billion across the 91-day (N9.96 billion), 182-day (N10.21 billion), and 364-day (N243.33 billion) tenors. The stop rates for the 91-day, 182-day, and 364-day tenor cleared higher at 3.00 percent (+290 bps), 3.24 percent (+294 bps), and 9.90 percent (+766 bps), respectively. The auction was mildly oversubscribed by 13 percent, with bid-to-cover ratios settling at 1.33x (91-day), 1.72x (182-day), and 1.09x (364-day), the report stated.
In the Open Market Operation (OMO) bills secondary market, the average yield across the curve closed flat at 3.77 percent. Average yield across the short-term maturities remained unchanged at 3.77 percent.
The Federal Government of Nigeria (FGN) bonds secondary market closed on a mildly positive note on Thursday, as the average bond yield across the curve cleared lower by 2 bps to close at 13.46 percent from 13.48 percent on the previous day. Average yields across short tenor and medium tenor of the curve declined by 1 basis point and 5 bps, respectively. However, the average yield across the long tenor of the curve closed flat, the report said.
