Naira records gain amid low liquidity

Naira on Tuesday gained against the dollar across foreign exchange (FX) markets amid low liquidity at the official market.

Liquidity at the Investors and Exporters (I&E) forex window, which reflects the level of market turnover, declined by 39.08 percent to $74.58 million on Tuesday compared to $122.43 million recorded on Monday.

After trading on Tuesday naira appreciated by 0.14 percent as the dollar was quoted at N461.50 as against the last close of N462.17 on Monday at the I&E window, Nigeria’s official market.

Most of the currency dealers who participated at the FX auction on Tuesday maintained bids between N446.00 (low) and N462.00 (high) per dollar, data from the FMDQ indicated.

The local currency appreciated marginally at the parallel market, popularly called black market, gaining 0.13 percent (N1) as the dollar was sold at the rate of N753 on Tuesday from N754 on the previous day.

Last week, the exchange rate at the investors and exporters window gained 0.05 percent to close at N461.50/US$1. Elsewhere, the (FX) reserves of the Central Bank of Nigeria (CBN) slipped by 0.06 percent to $37.02 billion, as the CBN continues to intervene across the various FX windows.

“The FX reserve position remains close to its historic high, and we doubt that the CBN wishes to see the exchange rate slip as general elections approach. Therefore, we believe that the current I&E window rate, or something very close to it, can be maintained for at least several months,” said analysts at Coronation Asset Management.

Related News

At the money market on Tuesday, the Overnight (O/N) rate closed flat at 10.81 percent, and the Open Repo (OPR) rate closed flat at 10.50 percent, according to a report by FSDH research.

The Nigerian treasury bills secondary market closed on a flat note with the average yield across the curve remaining unchanged at 1.79 percent. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 1.04 percent, 1.17 percent, and 2.48 percent, respectively.

The CBN is scheduled to conduct a Primary Market Auction to roll over NT-bills maturities worth N217.09 billion across 91-day (N1.71 billion), 182-day (N1.24 billion), and 364-day (N214.14 billion) tenors on Wednesday.

In the Open Market Operation (OMO) bills secondary market, the average yield across the curve closed flat at 1.84 percent. Average yield across the short-term maturities remained unchanged at 1.84 percent, the report stated.

The Federal Government of Nigeria (FGN) bonds secondary market closed on a positive note on Tuesday, as the average bond yield across the curve cleared lower by 19 bps to close at 13.49 percent from 13.68 percent on the previous day. Average yields across short tenor and medium tenor of the curve declined by 69 bps and 27 bps, respectively. However, the average yield across the long tenor of the curve closed flat. The 14-MAR-2024 maturity bond was the best performer with a decrease in the yield of 138 bps, while the 26-APR-2049 maturity bond was the worst performer with an increase in the yield of 3 bps.

The Debt Management Office (DMO) has released its FGN Bonds offer circular for February 2023 Primary Market Auction, indicating plans to offer FGN bonds worth N360 billion through the re-opening of 10-year FGN FEB 2028 (N90 billion), 10-year FGN APR 2032 (N90 billion), 20-year FGN APR 2037 (N90 billion), and 30-year FGN APR 2049 (N90 billion) tenors. The bond auction is scheduled to hold on February 13, with settlement on February 15, 2023.

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.