Parallel market: Naira trades flat at N460/$1


By Kayode Tokede

Naira at parallel market traded flat at N460 against the dollar on Thursday despite improved liquidity.

Nigerian NewsDirect gathered that the local currency traded at N540 against the pound, but lost 1.08per cent against the Euro to close at N470 on Thursday.

The price in foreign currency in the parallel market is coming against the backdrop of the surprising injection of about $90 million – $100 million into the foreign exchange market through the Wholesale Secondary Market Interventions by the Central Bank of Nigeria (CBN).

This is supposed to help improve liquidity in the market and strengthen the Naira in the short run.

At the Investors & Exporters Foreign Exchange (I& E FX) window, while the Naira lost by 0.33per cent and 0.02 per cent against the Euro and dollar to close at N424.37 and N386.42 respectively, it closed up against the pounds by 0.20 per cent printing at N473.09.

According to the FMDQ Exchange, a total of $85.61 was traded at the I & E FX window on Thursday.

The naira at the apex bank official rate remained flat at N361.00 against the dollar.

“Going forward, we expect the foreign exchange market to be dictated by heightened dollar demand and CBN FX policies,” InvestmentOne Research explained.

The increase in crude oil prices and the inflow of $3.4 billion from International Monetary Fund (IMF), is expected to be a big boost to the foreign exchange market. The country’s external reserves seem to have had some positive movements in recent weeks as it is now well over $35 billion.

However, at the overnight lending rate contracted by 13basis points to 2.3per cent, as system liquidity remains buoyant.

Trading in the NTB secondary market was bullish as average yield contracted by 8bps to 2.3 per cent. Yield at the long (-30 basis points) end contracted, following demand for the 190DTM (-77 basis points) instrument. The short and mid segments remained flat. Similarly, average yield contracted by 136 basis points to 6.7 per cent in the OMO secondary market.

Trading in the Treasury bond secondary market was bullish, as average yield contracted by nine basis points  to 10.4 per cent.

Across the curve, yields at the short (-21 basis points), mid (-5 basis points) and long (-1bp) segments contracted, following buying interests in the MAR-2024 (-66bps), FEB-2028 (-10 basis points) and MAR-2049 (-4bps) bonds, respectively.


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