Naira loses 0.52% as rising demand for dollars persists

The foreign exchange (FX) pressure continued on Wednesday as the naira depreciated against the dollar across market segments.

Naira lost 0.52 percent of its value as the dollar traded at N965 per dollar at the close of business on Tuesday and also opened Wednesday at the same rate, compared to N760 on Monday at the parallel market.

With the current rate, naira has lost 30.76 percent (N227) of its value to the dollar year-to-date from N738/$1 at the beginning of the year, on the black market.

Naira depreciation was attributed to strong demand for dollars by individuals travelling for business, school, medical or tourism.

At the Investors’ and Exporters’ (I&E) forex window, Nigeria’s official FX market, naira fell by 0.34 percent as the dollar was quoted at N776.60 on Tuesday compared to N773.98/$1 on Monday, data from the FMDQ indicated.

Year-to-date, the local currency has depreciated by 68.46 percent (N315.60) to N776.60/$1 from N461/$1 quoted at the beginning of the year.

Willing buyers and willing sellers maintained bids at N799.90/$1 high and N720.00 low, while the daily foreign exchange market turnover closed at $71.01 million on Tuesday.

At the money market, the Nigerian treasury bills secondary market closed on a mildly negative note on Tuesday, with the average yield across the curve increasing by 1 basis point to 7.17 percent from 7.16 percent on the previous day, according to a report by FSDH Research.

Average yield across the long-term maturities expanded by 9 bps. However, the average yields across short-term and medium-term maturities closed flat at 3.05 percent and 6.16 percent, respectively. The treasury bill for July 11, 2024 (+9 bps) maturity bill witnessed selling pressure.