• Thursday, July 18, 2024
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BusinessDay

Naira weakens as demand pressure resurfaces

Naira gains to N1,468.99/$ as external reserves crawl

The Naira experienced renewed demand pressure in the foreign exchange (FX) market on Friday, following a period of moderation lasting three trading days. During this time, the Naira weakened against other currencies, leading to increased demand in the FX market.

At the parallel market, the naira depreciated by 0.34 per cent as the dollar traded at N870 on Friday compared to N867 since the beginning of the week. People have been coming to buy dollars since yesterday. “Some of them are buying dollars to travel,” said a black market operator based in Lagos.

In the past few days, the naira steadied at N867 per dollar. In some areas, the cost of one dollar was as substantial as between N850 and N862 on the black market. Also, in the Investors’ and Exporters’ (I&E) forex window, Nigeria’s official foreign exchange FX market, the naira depreciated by 3.85 per cent as the dollar was quoted at N768.60 on Thursday from N740.08 on the previous day, data from the FMDQ indicated.

The FX market recorded a decline in turnover, which dropped by 42.15 per cent to $88.66 million on Thursday from $153.28 million on Wednesday. Willing buyers and sellers maintained bids as high as N869 per dollar on Thursday, weaker than the N845/$1 bid on Wednesday but stronger than N800 per dollar on Tuesday.

Read alsoNaira appreciates further on increased dollar supply

The market auction also recorded lower bids of N730.00, the same level on Wednesday and Tuesday but weaker than the N650.00 bids maintained on Monday at the I&E window. At the money market, the Overnight (O/N) rate decreased by 10.20 per cent to close at 1.30 per cent on Thursday as against the previous close of 11.50 per cent, and the Open Repo (OPR) rate decreased by 9.93 per cent to close at 0.90 per cent compared to 10.83 per cent on the previous day.

The Nigerian treasury bills secondary market closed on a negative note on Thursday, with the average yield across the curve increasing by 263 bps to 6.67 per cent from 4.04 per cent on the previous day, according to a report by FSDH research. The report noted that average yields across short-term, medium-term, and long-term maturities increased by 169 bps, 217 bps, and 317 bps, respectively. NTB 6-Jun-24 maturity bill witnessed maximum selling interest, with a yield increase of 373 bps each.