Naira closes at N502/$ at parallel market

By Kayode Tokede

Naira at the parallel market on Thursday closed flat against the Dollar at N502, but gained 0.17per cent and 0.28per cent against the Euro and Pound Sterling to close at N606 and N713 respectively.

However, the local currency at the Investors & Exporters Foreign Exchange (I & E FX) window gained 0.13 per cent against the Pound Sterling and Dollar closing at N579.60 and N410.95 respectively, it inched down by 0.18per cent against the Euro at N500.27.

Our correspondent had reported that Naira appreciated against the Dollar at the I&E window on Wednesday to close at N410.95/$1. This represents a 55 kobo gain when compared with the N411.50/$1 recorded on Tuesday.

An exchange rate of N420.77 to a dollar was the highest rate recorded during intra-day trading before it closed at N410.95/$1, while it also sold for as low as N400/$1 during intra-day trading.

According to FMDQ Exchange, a turnover foreign exchange of $89.89 million was traded by investors and exporters on Thursday.

Forex turnover at the I&E window rose massively by 261.5 per cent on Wednesday from $62.79 million/ recorded on Tuesday to $226.98 million on Wednesday.

“Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies,” analysts at Investment One research explained.

Money market rates rose as Open Buy Back and Overnight rates closed up by 233basis points and 208basis points at 17 per cent and 17.25 per cent respectively.

The bond market was slightly negative, particularly at the midpoint of the curve. The yields on the 5yr and 7yr benchmark bonds closed flat at 12.16 per cent and 12.78 per cent respectively, while the yield on the 10 year bond saw a 16bps uptick, printing at 13.10 per cent.

“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” according to analysts at Investment One research.

According to the Central Bank of Nigeria (CBN), the nation’s external reserve continued its decline, as it dropped by $26 million on Tuesday  to close at $34.077 billion, representing a 0.08per cent decline when compared to $34.103 billion recorded on Monday.

Nigeria’s foreign reserve has lost about $1.292 billion year-to-date, having recorded declines consecutively for 33 days.

The current position also represents the lowest level in over one year. The last time Nigeria’s foreign reserve position was this low was 7th May 2021, when it stood at $31.19 billion.

The decline persists despite the increase in global crude oil prices.

The decline can be attributed to a drop in crude oil export arising from the reduction in the purchase of Nigeria’s crude oil by India, a major importer of Nigerian crude, a nation currently burdened by a second wave of the covid-19 pandemic.