Naira decline by 0.18% at I & E FX window

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Story by Kayode Tokede

The Naira depreciated by 0.18 per cent to N362.13 against the dollar at the Investors & Exporters Foreign Exchange (I & E) last week.

At exchange rate rose at the Bureau De Change (BDC) market by 0.28 to N358 against dollar.

Elsewhere, the Naira remained flattish against the dollar at N358.13 against the dollar at the Interbank Foreign Exchange market amid the weekly injections of $210 million by Central Bank of Nigeria (CBN) into the foreign exchange market.

Also, the Naira was unchanged against the dollar at the parallel markets, closing at N360.00 to set for a new week trading session.

”Despite the continuous depletion of reserves, our estimates suggest no devaluation of the naira in 2019, as we believe the CBN has more than enough ammunition to sustain its naira defense. Hence, we expect the naira to remain resilient in the short to medium-term,” analysts at Cordros research noted.

However, the apex bank last week sold Treasury Bills (T-Bills) worth N318.91 billion through Open Market Operations (OMO) to partly mop up the surplus financial system liquidity engendered by matured T-bills worth N347.19 billion.

Analysts at Cowry Assets Limited said, “In the new week, CBN will refinance T-bills worth N121.88 billion, viz: 91-day bills worth N5.85 billion, 182-day bills worth N3.50 billion and 364-day bills worth N112.54 billion.

”We expect their stop rates to decline marginally, particularly at the long end of the curve, as investors have shown sustained preference for the 364-day bills in previous auctions.”

The values of FGN bonds traded at the over-the-counter (OTC) depreciated for most maturities tracked amid renewed sell pressure.

Particularly, the 5-year, 14.50% FGN JUL 2021 paper, the 7-year, 13.53% FGN MAR 2025 bond and the 10-year, 16.29% FGN MAR 2027 debt lost N0.03, N0.25 and N0.34 respectively; their corresponding yields rose to 14.42% (from 14.39%), 14.31% (from 14.24%) and 14.24% (from 14.18%) respectively.

However, the 20-year, 16.25% FGN APR 2037 note appreciated in value by N0.25 and its corresponding yield fell to 14.49% (from 14.45%).

Meanwhile, the values of the FGN Eurobonds traded at the international capital market fell for all maturities tracked – the 10-year, 6.75% JAN 28, 2021, the 20-year, 7.69% FEB 23, 2038 and the 30-year, 7.62% NOV 28, 2047 bonds lost USD0.19, $1.46 and $1.30 respectively; their corresponding yields rose to 4.27% (from 4.17%), 7.86% (from 7.71%) and 8.06% (from 7.94%) respectively.

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