Naira falls as FX market turnover declines by 29.15%

Naira, Nigeria’s currency, depreciated against the dollar following a 29.15 decline in the daily foreign exchange (FX) turnover at the official market.

The market turnover, which reflects the volume of dollar transactions in the market, declined to $99.33 million on Monday from $128.29 million on Friday, data from the FMDQ indicated.

Sources of dollars at the Investors and Exporters (I&E) forex window include export proceeds, proceeds from the sale of crude oil and the Central Bank of Nigeria (CBN) as a player in the market, a financial market dealer said.

Consequently, at the I&E window, naira lost 0.12 percent as the dollar was quoted at N462.78 on Monday as against N462.23 quoted on Friday, according to the data from the FMDQ.

Most currency dealers who participated at foreign exchange market auction on Monday maintained bids between N446.00 (low) and N466.00 (high) per dollar.

At the parallel market, also known as black market, naira, which has steadied at the rate of N738 since last week following a moderation in demand for dollars, weakened marginally by N1 per dollar on Monday following a slight increase in dollar demand.

The Nigerian treasury bills secondary market closed on a mildly positive note on Monday with the average yield across the curve decreasing by 1 basis point to 7.21 percent from 7.22 percent on the previous day, a report from the FSDH research stated.

Average yields across medium-term and long-term maturities declined by 1 basis point each. However, the average yield across the short-term maturities remained unchanged at 5.53 percent.

The Overnight (O/N) rate decreased by 0.04 percent to close at 11.34 percent on Monday as against the last close of 11.38 percent on Friday, while the Open Repo (OPR) rate remained unchanged at 11.00 percent.

The Federal Government of Nigeria (FGN) bonds secondary market closed on a mildly negative note on Monday, as the average bond yield across the curve cleared higher by 4 bps to close at 14.34 percent from 14.30 percent on the previous day. Average yield across the medium tenor of the curve increased by 13 bps, while the average yield across the short tenor of the curve declined by 1 basis point.

However, the average yield across the long tenor of the curve closed flat. The March 23, 2025 (23-MAR-2025) maturity bond was the best performer with a decrease in the yield of 1 basis point, while the March 17, 2023 (17-MAR-2027) maturity bond was the worst performer with an increase in the yield of 46 bps, the report noted.