Nigeria’s currency has strengthened to N465 per dollar on the black market since Thursday as a result of increased supply from Diaspora remittances following recent policies by the Central Bank of Nigeria (CBN).
With the current rate, naira has gained 2.10 percent or N10.00k day-on-day against the dollar, which closed at N475 on Wednesday at the same market, data from aboki fx.com show.
At the Bureau De Change (BDC) segment, naira has steadied at N475 since Friday, after gaining N1.00k from N474 traded on Thursday.
On November 30, the CBN said beneficiaries of diaspora remittances through the international monetary transfer operators (IMTO) would have such inflows in foreign currency (US dollar) through the designated bank of their choice.
In a statement on the same day, signed by Ozoemena Nnaji, director of trade & exchange, the CBN said recipients of such remittances may have the option of receiving these funds in foreign currency cash or into their domiciliary account.
The local currency closed stable at N392 to the dollar day-on-day on Friday at the Investors and Exporters (I&E) forex window, according to data from FMDQ.
Foreign exchange turnover eased by 7.0 percent Week-on-Week in the I&E window to a weekly average of $145.2 million compared to $157.2 million in the prior week, according to a report by Greenwich Merchant Bank. On a week-on-week basis, naira strengthened in the I&E window to close at N392.0/$ as against N394.0/$ in the prior week.
“We expect the market to remain lukewarm and investors will remain averse as market players begin to close their trading books for the year,” analysts at Greenwich said.
In a four-day trading week, activities in the fixed income market remained bearish from the prior week to settle the average yield across the market at 2.28 percent from 2.07 percent WoW. Investors continued booking profit in the Bond and Open Market Operation (OMO) bill markets while the NT-bill market closed marginally positive.
While investors sold off holdings at the belly of the curve, persistent bids at the head and tail of the curve spurred the NT-bill market into the light. Thereby, average yield in the NT-bill market plunged by 2bps WoW to settle at 0.38 percent from 0.40 percent. On the flip side, the OMO-bill market was largely a sellers’ market following chunk of offers across the curve save for the 16 FEB 2021, 16 MAR 2021 and 30 MAR 2021 papers. Consequently, average yield in the OMO-bill market spiked by 8bps to 0.54 percent from 0.47 percent.
With the system buoyed with an estimated N750bn in liquidity, Money Market rates softened further into single digits, bolstered by inflows from maturing OMO-bills with no offsetting outflows. Thus, the Overnight and Open Buy Back rates closed at 0.58 percent and 0.43 percent from 4.5 percent and 4.5 percent, respectively, in the prior week, the report noted.
