Nigeria’s currency on Thursday strengthened against the dollar at the parallel market and Bureau De Change (BDC) segment of the foreign exchange market following an improved supply of the dollar.
After trading on Thursday Naira closed at N475 per dollar, which was 0.63 percent stronger than N478 closed on Wednesday at both the black market and BDC segment.
Over 5,000 BDCs across the county received dollar disbursement from the Central Bank of Nigeria (CBN) on Thursday. The CBN sells $10,000 twice weekly to BDCs.
At the Investors and Exporters (I&E) forex window, the daily foreign exchange turnover increased by 55.83 to $79.07 million on Thursday from $50.74 million recorded on Wednesday, data from the FMDQ showed.
Consequently, Naira steadied at N400.00k at the I&E window on Thursday. Investors maintained bids at between N380.35k and N422.59k per dollar.
At the money market on Thursday, the Nigeria treasury bills market closed on a negative note with average yield across the curve increasing by 32 bps to close at 1.35 percent from 1.03 percent on the previous day, a report by FSDH research stated.
The average yields across medium-term and long-term maturities widened by 23 bps and 55 bps, respectively. However, the average yield across the short-term maturities closed flat at 0.49 percent. Yields on 10 bills advanced with the 26-Aug-21 maturity bill recording the highest yield increase of 105 bps, while yields on 10 bills remained unchanged. Moreover, the CBN held its scheduled Primary Market Auction on February 10 selling NT-Bills worth N130.88 billion across the 91-day (N24.67 billion), 182-day (N16.06 billion), and 364-day (N90.15 billion) tenors. The stop rates for the 91-day, 182-day, and 364-day tenors cleared higher at 1.00 percent (+45 bps), 2.00 percent (+70 bps), and 4.00 percent (+200 bps) respectively.
The auction was mildly oversubscribed by 17 percent with bid-to-cover ratios settling at 1.55x (91-day), 2.19x (182-day), and 1.04x (364-day).
The Overnight (O/N) rate increased by 0.58 percent to close at 5.83 percent as against the last close of 5.25 percent, and the Open Buy Back (OBB) rate increased by 0.33 percent to close at 5.33 percent from 5.00 percent on the previous day.
“The money market rates are likely to remain subdued, barring any significant funding needs by banks,” analysts at FSDH said.
In the Open Market Operation (OMO) bills market, the average yield across the curve remained unchanged at 6.69 percent. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 4.37 percent, 5.42 percent, and 8.04 percent, respectively.
