Naira appreciates by 0.5% at I & EFX window

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By Kayode Tokede

Naira on its week-on-week (w/w) transaction appreciated by 0.5 per cent against the dollar at Investors & Exporters Foreign Exchange (I & EFX) window.

The naira at the specialized window for investors and exporters closed to N392.00 and its Year-Till-Date performance, it dropped by seven per cent and by 2.6 per cent to N465.00 against the dollar in the parallel market.

In the Forwards market, the naira was flat in the 1-month (N397.76 against the dollar) contract, but strengthened at the 3-month (+0.3 per cent to N403.86 against the dollar), 6-month (+0.4per cent to N413.71 against the dollar) and 1-year (+0.6per cent to N431.64 against the dollar) contracts.

The overnight (OVN) rate contracted by 392basis ponits w/w to 0.6per cent.

“We note that the rate stayed depressed through the week as inflows into the system for SWAP and OMO maturities (N250.51 billion) saturated system liquidity,” analysts at Cordros Research explained.

They added that, “Trading activity in the Treasury bills secondary market was mixed, albeit with a bearish tilt, as average yield across all instruments expanded by three basis points  to 0.5per cent.

“The overall market remained in a lull as investors maintain risk-off sentiments at current market yields. Across the segments, average yield expanded by eight basis points to 0.5 per cent at the OMO secondary market, but pared by two basis points to 0.4 per cent at the NTB segment.

“In the coming week, we maintain our view for quiet trading activities in the T-bills secondary market, as investors wrap up their books for year end.

“Also, we expect participants’ focus to be on the last NTB PMA for the year, where the CBN is expected to roll-over N74.84 billion worth of maturities.”

According to Cordros Research weekly report, the Treasury bonds secondary market remained bearish, following profit-taking across the benchmark curve for year-end activities.

“Consequently, the average yield expanded by 56basis points to 5.9per cent. Across the benchmark curve, average yield expanded at the short (+72 basis points), mid (+62 basis points) and long (+49bps) segments, due to sell-offs of the MAR-2025 (+159 basis points), FEB-2028 (+128 basis points) and MAR-2050 (+122 basis points) bonds, respectively.

“We maintain our view of sustained bearish sentiments in the Treasury bonds secondary market, as investors continue to book profit accumulated in the year.”