Naira appreciated at the official foreign exchange (FX) market on Tuesday, gaining 1.33 percent despite the low dollar liquidity in the market.
At the end of trading on the Investors’ and Exporters’ (I&E) forex window, the dollar was quoted at N745.19, which was stronger than N755.27 quoted on Friday, data from the FMDQ indicated.
The naira appreciation followed a moderation in demand for dollars amid low liquidity.
There was low transaction in the market as the willing buyers and willing sellers could not bring enough dollars to meet demands.
Read also: Naira gains as FX market resumes trading Tuesday
Consequently, the daily FX market turnover declined by 36.54 percent to $81.12 million on Tuesday from $127.82 million recorded on Friday.
At the parallel market, also known as black market, naira weakened against the dollar at the close of business as demand moved up slightly.
The dollar closed at N1,005 during the evening trading after recovering to N1,000 in the morning trading.
On Tuesday, naira gained 0.79 percent (N8) over the dollar as the foreign exchange (FX) resumed after the independence holiday.
The market opened with the dollar trading at N1,000 on Tuesday as against N1,008 on Friday at the parallel market.
At the money market on Tuesday, the Nigerian treasury bills (NT-Bills) secondary market closed on a mildly positive note with the average yield across the curve decreasing by 1 basis point to 7.27 percent from 7.28 percent on the previous day, a report from the FSDH Research stated.
Average yields across medium-term and long-term maturities declined by 1 basis point each. However, the average yield across the short-term maturities closed flat at 3.69 percent. NTB for June 6, 2024 (-2 bps) maturity bill witnessed mild buying interest.
The CBN held its scheduled Primary Market Auction on September 27, selling NT-Bills worth N177.12 billion across the 91-day (N1.75 billion), 182-day (N1.56 billion), and 364-day (N173.81 billion) tenors.
Read also: From N0.62/$, naira falls eightfold in 50 years
The stop rates for the 91-day, 182-day, and 364-day tenor cleared lower at 4.99 percent (-151 bps), 6.55 percent (-45 bps), and 11.37 percent (-161 bps), respectively. The auction was heavily oversubscribed by 344 percent, with bid-to-cover ratios settling at 4.05x (91-day), 4.26x (182-day), and 4.45x (364-day).
The Overnight (O/N) rate decreased by 1.95 percent to close at 1.45 percent compared to 3.40 percent on the previous day, and the Open Repo (OPR) rate decreased by 1.70 percent to close at 1.00 percent compared to 2.70 percent on the previous day.
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