By Kayode Tokede
Naira at the parallel market appreciated by 0.42per cent to close at N487 against the dollar on Wednesday.
The naira also closed up by 0.85per cent against the euro at N580 and closed flat at N650 against pound sterling.
However, naira depreciated against the dollar at the Investors & Exporters (I&E) window of the foreign exchange market on Wednesday, according to data from the FMDQ Security Exchange where foreign exchange is officially traded.
At the I & EFX window, while the naira closed down by 1.20 per cent and 0.04 per cent against the euro and pound sterling to print at N475.64 and N523.23 respectively, it gained 0.13per cent against the dollar to close at N394.00.
According to FMDQ, a total turnover of $51.51million was trade by investors and exporters on Wednesday.
The local currency remained flat at N379.00 against the dollar at interbank market of the Central Bank of Nigeria (CBN).
The CBN said Nigeria’s Foreign Exchange Reserves rose from $34.94 billion in November 2020 to $36.23 billion as at January 21.
The CBN Governor, Godwin Emefiele, said at the January Monetary Policy Committee meeting of the bank, on Tuesday, that improvement in crude oil prices contributed to the increase.
“The MPC noted the increase in the level of external reserves, which stood at 36.23 billion dollars as at 21st January, 2021 compared with 34.94 billion dollars at the end of November 2020,” he said.
“This reflected improvements in crude oil prices, partial global economic recovery amid optimism over the discovery and distributions of COVID-19 vaccines by most developed economies,’’ he said.
However, the continuous increase in the spread between the rates at which naira is traded at both markets has been attributed to the significant decline in dollar inflow from crude sales, Nigeria’s main source of revenue, due to a crash in oil prices in April last year, and the coronavirus pandemic.
In order to bridge this gap, the Central Bank of Nigeria has initiated policies to regulate the market.
However, the money market rates inched up today as Open Buy Back and Overnight rates increased by 50basis points and 25 basis points to five per cent and 5.50 per cent respectively.
The bond market was somewhat negative today as yields increased on medium to long tenures.
Analysts at InvestmentOne Research stated that, “We witnessed the yield on the 10yr benchmark bond increase by 21 basis points to close at 8.55 per cent, while the yield on the 5yr and 7yr benchmark bond closed flat at 6.68 per cent and 7.95 per cent respectively.
“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation.”