Naira falls to N1,035.12/$ despite increased dollar liquidity

The foreign exchange (FX) market on Wednesday recorded depreciation of naira to N1,035.12/$, the second time in the new year.

After trading on Wednesday, naira weakened by 4.50 percent as the dollar was quoted at N1,035.12 . n to 8.m quoted on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ indicated.

This was attributed to increased demand for the greenback amid a significant rise in dollar supply at the official market.

The volume of FX transactions, representing the daily market turnover, rose significantly to $85.68 on Wednesday from $15.38 million recorded on Tuesday.

The FX rate quoted by willing buyers and willing sellers on the spot trading depreciated to N1,224, high on Wednesday as against N1,130 and the lower bid rate firmed to N700 from N744.50 per dollar.

At the money market, the Nigerian treasury bill secondary market closed on a mildly positive note on Wednesday, with the average yield across the curve decreasing by 2 bps to 6.41 per cent from 6.43 per cent on the previous day, according to FSDH research.

Average yield across the long-term maturities declined by 4 bps. However, the average yields across short-term and medium-term remained unchanged at 2.54 per cent and 4.74 per cent, respectively. Treasury bills for the September 5, 2024 (-77 bps) maturity bill witnessed maximum buying interest.

The Overnight (O/N) rate increased by 0.05 per cent to close at 16.00 per cent as against the last close of 15.95 per cent, and the Open Repo (OPR) rate increased by 0.13 per cent to close at 15.46 per cent compared to 15.33 per cent on the previous day.