Naira drops by down by 0.08% to N394.50 at I & E FX market
Naira at the Investors & Exporters Foreign Exchange Market (I& E FX) on Monday dropped by 0.08 per cent to close at N394.50 against the dollar.
The local currency also closed down by 2.74per cent and 2.89per cent against the euro and pound sterling at the I & E FX window market at N477.47 and N537.52 respectively.
The FMDQ Exchange disclosed that a total turnover of $39.99 million was traded at the I & E FX window on Monday.
FMDQ, foreign exchange turnover declined from $77.04 million on last Thursday, to $44.51 million on last Friday.
At the parallel market, while the Naira closed flat against the euro and dollar at N580 and N477 respectively, it gained 0.15per cent against the pound sterling to close at N647.
The exchange rate at the parallel market had closed at N475/$1 on Thursday.
However, Nigerian NewsDirect gathered that naira traded flat at N379 against the dollar at the Inter- bank market of the Central Bank of Nigeria (CBN).
The exchange rate disparity between the parallel market and the I & E FX official market is about N
Analysts at Investment One research said, “Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies.”
The CBN in a new circular, read the riot act to the International Money Transfer Operators (IMTOs) as they have threatened to sanction some of them who still facilitate diaspora remittances in naira, contrary to its earlier directive that it must be in foreign currency.
The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
There are fears that the exchange rate at the black market might be under pressure in the coming weeks as importers scramble for dollars to meet their demands.
However, the overnight lending rate declined by 400basis points to 6.5per cent, following inflows into the system from FGN bond coupon payments (N37.96 billion).
Trading in the NTB secondary market started the week with bearish sentiments, as average yield expanded by two basis points to 0.5per cent.
Across the curve, average yield expanded at the short (+6 basis points) and mid (+2 basis points) segments, following sell-offs of the 66DTM (+32 basis points) and 108DTM (+10basis points) instruments, respectively.
Average yield was flat at the long end. Similarly, average yield expanded by 32 basis points to 1.2per cent at the OMO secondary market.
The Treasury bonds secondary market turned bullish in today’s session, as average yield expanded by 13bps to seven per cent.
Across the curve, average yield expanded at the short (+38 basis points) end, following sell-off of the MAR-2024 (+167 basis points) bond, and declined at the mid (-3 basis points) segment, due to demand for the MAR-2027 (-10 basis points) bond; the long end was flat.
