• Tuesday, July 16, 2024
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BusinessDay

Naira appreciates marginally amid low liquidity

Dollar nears N2,000 on black market as scarcity worsens

Naira on Tuesday appreciated marginally against the dollar amid low liquidity at the official foreign exchange market.

The foreign exchange market on Tuesday resumed trading after the two-day holidays declared by the Federal Government to mark the Easter celebration.

After trading on Tuesday, the dollar was quoted at the rate of N462.88/$1 as against N463.25/$1 quoted on Thursday before the holidays at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

Most currency dealers who participated at the foreign exchange market auction on Tuesday maintained bids between N460.00 (low) and N466.00 (high) per dollar.

The daily foreign exchange market turnover, which reflects the level of activity in the market, declined by 25.40 percent to $80.90 million on Tuesday from $101.45 million on Thursday last week.

The naira/dollar exchange rate steadied at N742/$ at the parallel market on Tuesday as trading resumed across foreign exchange markets.

At the parallel market, also known as black market, the naira has hovered around N750 since the beginning of the year.

The local currency has hovered around N461 to N462 per dollar since the beginning of the year at the I&E forex window, Nigeria’s official FX market.

At the money market on Tuesday, the Overnight (O/N) rate increased by 0.12 percent to close at 19.00 percent as against the last close of 18.88 percent on Thursday, and the Open Repo (OPR) rate also increased by 0.12 percent to close at 18.62 percent compared to 18.50 percent on the previous day, according to a market report by FSDH research.

The Central Bank of Nigeria (CBN) is scheduled to conduct a primary market auction to roll over treasury bills maturities worth N149.64 billion across 91-day (N3.15 billion), 182-day (N2.52 billion), and 364-day (N143.97 billion) tenors.

The Nigerian treasury secondary market closed on a mildly positive note with the average yield across the curve decreasing by 1 basis point to 8.08 percent from 8.09 percent on the previous day.

Read also: CBN, Bankers’ Committee sensitise traders in Calabar on cashless policy, eNaira

Average yields across medium-term and long-term maturities declined by 1 basis point and 2 bps, respectively. However, the average yield across the short-term maturities closed flat at 4.03 percent. NTB 25-Jan-24, NTB 8-Feb-24, and NTB 7-Mar-24 maturity bills witnessed maximum buying interest, with a yield decline of 2 bps each.

In the Open Market Operation (OMO) secondary market, the average yield across the curve closed flat at 4.01 percent on Tuesday. Average yield across the short-term maturities remained unchanged at 4.01 percent.

The report noted that the Federal Government of Nigeria (FGN) bonds secondary market closed on a flat note on Tuesday, as the average bond yield across the curve closed flat at 14.26 percent.

Average yield across the short tenor of the curve declined by 1 basis point, while the average yield across the long tenor of the curve expanded by 1 basis point.

However, the average yield across the medium tenor of the curve remained unchanged. The 23-March 23, 2025 and March 17, 2027 maturity bonds were the best performers with a decrease in the yield of 1 basis point each, while the April 26, 2049 maturity bond was the worst performer with an increase in the yield of 4 bps.