Naira on Wednesday depreciated against the US dollar at the official and unofficial foreign exchange (FX) markets, following an increase in demand for the greenback by the end users.
“There is demand for dollars, especially coming importers who have some obligations to meet,” one trader told BusinessDay.
At the Investors and Exporters (I&E) forex window, Nigeria’s official market, naira depreciated by 0.09 percent as the dollar was quoted at N461.90on Wednesday as against the last close of N461.50 on Tuesday, data from the FMDQ indicated.
Most currency dealers who participated at the FX auction on Wednesday maintained bids between N440.00 (low) and N462.00 (high) per dollar.
The level of activity at the I&E window increased on Wednesday as the daily foreign exchange market turnover rose by 17.32 percent to $151.26 million from $117.63 million recorded on Tuesday.
At the parallel market also known as the black market, naira fell by N1 against dollar as the market closed at N744/$1 as against N743 per dollar closed on the previous day.
The value of Nigeria’s currency, Naira, is projected to strengthen to N680 per dollar this year, according to Bismarck Rewane, managing director/chief executive officer of Financial Derivatives Company Limited.
At the money market, the Overnight (O/N) rate remained unchanged at 9.83 percent, and the Open Repo (OPR) rate remained unchanged at 9.50 percent, according to a report by the FSDH research.
Read also: Naira seen strengthening to N680 per dollar in 2023
The Nigerian treasury bills secondary market closed on a flat note on Wednesday with the average yield across the curve remaining unchanged at 2.88 percent. Average yields across short-term, medium-term, and long-term maturities closed flat at 1.63 percent, 3.12 percent, and 3.89 percent, respectively.
In the Open Market Operation (OMO) bills secondary market, the average yield across the curve closed flat at 3.36 percent. Average yields across short-term and medium-term maturities remained unchanged at 3.52 percent and 3.03 percent, respectively.
The Federal Government of Nigeria bonds secondary market closed on a mildly positive note on Wednesday, as the average bond yield across the curve cleared lower by 5 bps to close at 13.11 percent from 13.16 percent on the previous day. Average yields across short tenor and medium tenor of the curve declined by 1 basis point and 15 bps, respectively. However, the average yield across the long tenor of the curve remained unchanged.
The February 28, 2028 maturity bond was the best performer with a decrease in the yield of 41 bps, while the January 22, 2026 maturity bond was the worst performer with an increase in the yield of 15 bps. Furthermore, the secondary bond market is likely to remain subdued in the short term.
