Naira gains as dollar liquidity rise by 107.24%

The foreign exchange (FX) market closed on Thursday with naira reporting a marginal gain of 0.03 percent over the United States dollar following increased liquidity.

The volume of dollars traded in the market, also known as FX market turnover rose significantly by 107.24 percent to $108.43 million on Thursday compared to $56.11 million recorded on Wednesday, data from the FMDQ indicated.

The Naira appreciated by 0.03 percent as the dollar was quoted at N462.88 on Thursday as against the last close of N463.00 on Wednesday at the Investors and Exporters (I&E) forex window, Nigeria’s official FX market.

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

At the parallel market, naira has steadied at the rate of N738 since last week following a moderation in demand for dollars.

Money market rate or overnight rate, which is the rate at which banks borrow from each other, decreased by 0.12 percent to close at 11.38 percent on Thursday as against the last close of 11.50 percent on Wednesday, while the Open Repo (OPR) rate remained unchanged at 11.00 percent.

The Nigerian treasury bills secondary market closed on a negative note on Thursday with the average yield across the curve increasing by 18 bps to 6.85 percent from 6.67 percent on the previous day, according to a market report by FSDH research.

Average yield across the long-term maturities expanded by 32 bps. However, the average yields across short-term and medium-term maturities closed flat at 4.99 percent and 6.34 percent, respectively. Treasury bills of March 7, 2024 (NTB 7-Mar-24) maturity bill witnessed selling pressure, with a yield increase of 158 bps.

The report noted that the Federal Government of Nigeria (FGN) bonds secondary market closed on a mildly negative note on Thursday as the average bond yield across the curve cleared higher by 3 bps to close at 14.23 percent from 14.20 percent on the previous day. Average yield across the long tenor of the curve increased by 7 bps, while the average yield across the medium tenor of the curve declined by 2 bps.

However, the average yield across the short tenor of the curve closed flat. The April 26, 2029 (26-APR-2029) maturity bond was the best performer with a decrease in the yield of 5 bps, while the March 27, 2050 (27-MAR-2050) maturity bond was the worst performer with an increase in the yield of 24 bps.

Nigerian lawmakers have approved President Muhammadu Buhari’s request to convert N22.7 trillion ($49.0 billion) loans from the central bank.

According to a report endorsed by a special committee of parliament, advances were made to ensure that the government does not shut down.

The approval from the Senate is expected to increase Nigeria’s debt burden by 50 percent and push the country’s debt-to-gross domestic product ratio near the 40 percent limit set by the government, the report stated.

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.