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Naira appreciation continues amid fresh CBN intervention with BDCs



The naira continued its weeks-long appreciation against the dollar in the foreign exchange market amid the Central Bank of Nigeria’s fresh effort to defend the currency.

FMQD data showed the exchange as N1, 230.61 per US dollar on Monday from N1, 251.05.

This represents a N20.89 gain from the figure recorded last Friday.

Similarly, the naira traded at N1, 220 per dollar on Monday at the parallel market.

The development follows another tranche distribution of $10,000 to each BDC at N1,101 per dollar.

For over four weeks now, the naira has recorded sustained gains against the dollar in the foreign exchange market.

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Money market

Naira loses 1.47% on black market



The naira on Wednesday weakened against the dollar, losing 1.47 percent at the parallel market also, known as the black market.

The local currency was quoted at N1,500 per dollar on Wednesday, a day after the Central Bank of Nigeria (CBN) raised its monetary policy rate (MPR), by 150 basis points to 26.25 percent, the third straight time this year.

The naira had appreciated against the dollar for two days to N1,478 from its renewed peak of N1,530 on May 14, 2024, on the parallel market

A trader said that there was a significant demand for the dollar, but it was not readily available in large quantities.

At the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, the naira appreciated marginally by 0.23 percent as the dollar was quoted at N1,465.68 as against N1,468.99 quoted on Monday according to the data from the FMDQ Securities Exchange Limited.

The intraday high closed at N1,549 per dollar on Tuesday, stronger than N1,556 closed on Monday. The intraday low closed flat at N1,401/$1 compared to N1,400 quoted on Monday.

The daily foreign exchange market turnover increased by 66.14 percent to $268.17 million on Tuesday from $161.41 million recorded on Monday.

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Money market

UBA will meet N500bn capital base before deadline – CFO



The Executive Director of Finance and Risk Management for United Bank for Africa, Ugochukwu Nwaghodoh, has said that the banking group would meet the new capital requirement before the March 2026 deadline given by the Central Bank of Nigeria.

He stated this during the week at the 75th International Global Media Conference held at the bank’s headquarters in Lagos.

He said, “The central bank has said that every bank must have N500bn in pure share capital and that was not necessarily related to the existing shareholder funds. Obviously, it will strengthen the banking system and the banks in Nigeria will be able to do a lot more in terms of the economy.

“The central bank gave recommendations on how to achieve this, either by raising additional funds, mergers and acquisitions and you can choose not to raise more funds and step down your license to the level where your current capital can support.

“For UBA, we operate with the highest license around, which is an international licence. We have very strong, virile operations across Africa and centres across the world. We are maintaining this route and we are looking at options. We have engaged financial advisers, and we indeed have set in motion the process to get the requisite approval from shareholders.”

According to Nwaghodoh, the firm will on Friday get the approval of shareholders to enable it raise fresh fund.

“We note, however, that we are committed to achieving this well ahead of the deadline,” he added.

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Money market

DMO raises N4.9trn for Ways and Means, says domestic market major source of funding for FG



The Debt Management Office (DMO) has, again, sought the support of primary dealer market makers (PDMM) to raise more financing for Nigeria’s domestic debt plan.

The DMO has an outstanding N1.5 trillion to raise from the Federal Government’s proposed N6 trillion bond having already raked in N4.5 trillion from previous issuances.

The director-general of the Debt Management Office (DMO), Patience Oniha, who led a team from the debt office for a meeting with the primary dealer market makers in Lagos on Monday, noted that the DMO had raised part of the finance for both the domestic debt and ways and means borrowing, which they intended to complete.

“We had a meeting earlier in the year where we talked about the DMO’s borrowing plan, which is the FGN’s borrowing plan, and we told you what we were doing from the budget because that’s the principal document for refinancing.

“Then, we discussed the Ways and Means borrowing and how to put that in order. At that time, the budget had N6 trillion of domestic borrowing, new borrowing, not refinancing. And then the ways and means at that time, there was N7.3 trillion that the National Assembly approved for securitisation,” she said.

“We’re happy that with your support for the new domestic borrowing in the 2024 budget, which was N6 trillion, we raised N4.5 trillion. So it’s not our money, you gave us money and we’d like to thank you.”

“For the ways and means, out of that N7.3 trillion that the National Assembly approved for securitisation, we have raised N4.905 trillion. So, there’s still a balance in both cases, but let’s see how the rest of the year goes,” Oniha stated.

At the April bond auction, the DMO offered N450 billion across three bonds: the April 2029 bond (Reopening, 5-year), the February 2031 bond (Reopening, 7-year), and the May 2033 bond (New, 9-year reopening).

“Although subscriptions totalled N551.33 billion, this was relatively low compared to previous months but still 22.52 percent higher than the offer. The subscription distribution was N100.57 billion for the 2029 bond, N76.88 billion for the 2031 bond, and N373.88 billion for the 2033 bond.

“Ultimately, the DMO sold N380.77 billion, 15.38 percent less than the total subscriptions. The stop rates decreased to 19.29 percent, 19.74 percent, and 19.89 percen, compared to 19.30 percent, 19.75 percent, and 20 percent in the previous auction,” Futureview Research analysts said in their May 20 note to investors.

Also at the meeting, Nadia Zakari, president of Financial Market Dealers Association, stated that their interactions with the DMO have been critical in making decisions that shape the country in the long term.

“As market operators, we act as financial intermediaries who interact with other market operators, investors, and their clients. I think it’s because of the size and importance of these interactive sections, that our business environment is ever-evolving, and constantly changing.

“These constant engagements are crucial as some of the interactions we’ve had as highlighted by the director-general have been critical in making decisions as we strategically plan for the rest of the year,” she stated.

United Capital research analysts said in their May 20 note, “This week, we expect mixed interest in FGN Bonds. The overall direction of the market will be dependent on the outcome of the MPC meeting.”

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