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Nigeria Increases By 0.25% Despite FX Market Decline

Despite a decline in liquidity at the official foreign exchange market, also known as the Investors and Exporters (I&E) FX window, the Naira, the currency of Nigeria, increased on Thursday by 0.25 percent.

The daily foreign exchange market turnover dropped to $110.22 million on Thursday from $123.78 million on Wednesday, according to data from the FMDQ, which resulted in low activity at the I&E window.

Following Thursday’s trading, the dollar was valued at N428.12/$ as opposed to N429.20 on Wednesday at the official market.

The majority of currency dealers who took part in the FX auction kept their offers within the range of N415.00 (low) and N444.00 (high) per dollar.

The local currency reversed prior advances in the so-called black market, where the dollar was traded for N655 on Thursday as opposed to N640 the day before.

A trader told BusinessDay, “There is a demand in the market today, and I believe that is why the dollar has gone higher again.”

Due to rising demand on the black market as a result of banks’ inability to provide end users’ legitimate demand for foreign exchange due to a shortage of dollars on the official market, the local currency last week reached its pinnacle at a rate of N710 per dollar.

READ MORE: AMC Entertainment To Increase Share Count

According to a report by FSDH Research, on Thursday at the money market, the Overnight (O/N) rate remained constant at 15.00 percent while the Open Repo (OPR) rate jumped by 0.17 percent to close at 14.67 percent as opposed to 14.50 percent the day before.

The average yield across the curve for Nigerian Treasury bills finished steady at 6.56 percent as the secondary market for these securities concluded on Thursday. The typical yield for short-, medium-, and long-term maturities remained constant at 9.16%, 5.86%, and 6.32%, respectively.

On Thursday, the secondary market for Open Market Operation (OMO) bills came to a negative conclusion as the average yield throughout the curve increased by 46 basis points to close at 10.29 percent, up from 9.83 percent the day before. The average yield for long-term maturities increased by 77 basis points. The average rate for short-term maturities did, however, decrease by 1 basis point. While OMO 16-Aug-22 (-1 basis point) maturity bill saw only sporadic purchasing interest, OMO 21-Feb-23 (+231 bps) maturity bill experienced significant selling pressure.

The average bond yield throughout the curve increased by 2 basis points to close at 12.54 percent on Thursday, up from 12.52 percent the day before, according to the report, which indicates that the secondary market for FGN bonds ended the day on a somewhat negative note. The short tenor of the curve’s average yield increased by 11 basis points. However, average yields for the curve’s medium and long tenors remained constant.

The bond with the 14-MAR-2024 maturity had the worst performance, with a 21 bps increase in yield. In addition, the secondary bond market is probably going to stay quiet for the time being.

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Despite a decline in liquidity at the official foreign exchange market, also known as the Investors and Exporters (I&E) FX window, the Naira, the currency of Nigeria, increased on Thursday by 0.25 percent.

The daily foreign exchange market turnover dropped to $110.22 million on Thursday from $123.78 million on Wednesday, according to data from the FMDQ, which resulted in low activity at the I&E window.

Following Thursday’s trading, the dollar was valued at N428.12/$ as opposed to N429.20 on Wednesday at the official market.

The majority of currency dealers who took part in the FX auction kept their offers within the range of N415.00 (low) and N444.00 (high) per dollar.

The local currency reversed prior advances in the so-called black market, where the dollar was traded for N655 on Thursday as opposed to N640 the day before.

A trader told BusinessDay, “There is a demand in the market today, and I believe that is why the dollar has gone higher again.”

Due to rising demand on the black market as a result of banks’ inability to provide end users’ legitimate demand for foreign exchange due to a shortage of dollars on the official market, the local currency last week reached its pinnacle at a rate of N710 per dollar.

READ MORE: AMC Entertainment To Increase Share Count

According to a report by FSDH Research, on Thursday at the money market, the Overnight (O/N) rate remained constant at 15.00 percent while the Open Repo (OPR) rate jumped by 0.17 percent to close at 14.67 percent as opposed to 14.50 percent the day before.

The average yield across the curve for Nigerian Treasury bills finished steady at 6.56 percent as the secondary market for these securities concluded on Thursday. The typical yield for short-, medium-, and long-term maturities remained constant at 9.16%, 5.86%, and 6.32%, respectively.

On Thursday, the secondary market for Open Market Operation (OMO) bills came to a negative conclusion as the average yield throughout the curve increased by 46 basis points to close at 10.29 percent, up from 9.83 percent the day before. The average yield for long-term maturities increased by 77 basis points. The average rate for short-term maturities did, however, decrease by 1 basis point. While OMO 16-Aug-22 (-1 basis point) maturity bill saw only sporadic purchasing interest, OMO 21-Feb-23 (+231 bps) maturity bill experienced significant selling pressure.

The average bond yield throughout the curve increased by 2 basis points to close at 12.54 percent on Thursday, up from 12.52 percent the day before, according to the report, which indicates that the secondary market for FGN bonds ended the day on a somewhat negative note. The short tenor of the curve’s average yield increased by 11 basis points. However, average yields for the curve’s medium and long tenors remained constant.

The bond with the 14-MAR-2024 maturity had the worst performance, with a 21 bps increase in yield. In addition, the secondary bond market is probably going to stay quiet for the time being.

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