Naira gains amid low liquidity

Naira on Tuesday appreciated by 0.14 percent against the dollar despite low liquidity at the Investors and Exporters (I&E) forex window.

The daily foreign exchange market turnover, which reflects the level of activity and liquidity in the market declined by 35.77 percent to $46.04 million on Tuesday from $71.68 million recorded on Friday.

At the close of the first trading day of the week on Tuesday,after the workers’ day holiday, the dollar was quoted at N462.33 as against N463.00 quoted on Friday at the I&E window, Nigeria’s official foreign exchange market, data from the FMDQ indicated.

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

At the parallel market, also known as black market, naira depreciated against the dollar, losing 0.40 as the dollar traded at N738 as against N735 per dollar on Friday.

At the money market on Tuesday, the Overnight (O/N) rate decreased by 1.75 percent to close at 11.38 percent as against the last close of 13.13 percent on Friday and the Open Repo (OPR) rate decreased by 1.63 percent to close at 11.00 percent compared to 12.63 percent on the previous day.

“Despite the Open Market Operation (OMO) repayment of N50.00 billion, the money market rates are likely to remain at current levels in the near term, barring any mop-up activity by the Central Bank of Nigeria (CBN).

The Nigeria treasury bills secondary market closed on a mildly positive note with the average yield across the curve decreasing by 1 basis point to 6.67 percent from 6.68 percent on the previous day.

A report by FSDH research noted that average yield across the long-term maturities declined by 1 basis point.

However, average yields across short-term and medium-term maturities closed flat at 4.99 percent and 6.34 percent, respectively. NTB 7-Dec-23, NTB 25-Jan-24, NTB 8-Feb-24, and NTB 7-Mar-24 maturity bills witnessed mild buying interest, with a yield decline of 1 basis point each.

According to the report, FGN bonds secondary market closed on a mildly positive note on Tuesday, as the average bond yield across the curve cleared lower by 1 basis point to close at 14.20 percent from 14.21 percent on the previous day.

Average yields across short tenor and medium tenor of the curve declined by 1 basis point and 4 bps, respectively. However, the average yield across the long tenor of the curve closed flat. The 26-APR-2029 maturity bond was the best performer with a decrease in the yield of 9 bps.

The Debt Management Office has started offering a 2-Year FGN Savings Bond due May 10, 2025, and a 3-Year FGN Savings Bond due May 10, 2026, at the interest rate of 10.391 percent per annum and 11.391 percent per annum, respectively. The bond auction is scheduled to close on May 5, with settlement on May 10, 2023. The interest will be paid quarterly, with a redemption bullet repayment on maturity.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.