Naira closes at N505/$ at parallel market

The Naira at the parallel market dropped by 0.60 per cent on Tuesday to close at N505 against the Dollar.

The local current depreciated by 0.14 per cent and 0.17 per cent against th Pound Sterling and Euro to close at N716 and N608 respectively.

At the Investors & Exporters Foreign Exchange Window (I & EFX), while the Naira gained by 0.29per cent and 0.01per cent against the Pound sterling and Euro closing at N576.49 and N496.40 respectively, it inched down by 0.23per cent against the Dollar at N411.75.

According to the Central Bank of Nigeria (CBN), te country’s external reserve continued to plunge further, as it dipped by $40.79 million on Thursday, 10th June, 2021 to close at $34 billion.

The decline represents a 0.12per cent reduction in Nigeria’s external reserve position and the lowest level since May 2020.

A total of $1.37 billion has been lost in reserves year-to-date, while month-to-date loss stands at $222.33 million.

The decline has persisted despite the gains recorded in the global crude oil price. Oil prices are already trading over $72 per barrel. This has however been attributed to the decline in crude oil sales, due to the effect of the covid-19 pandemic on the buying capacity of India, which is one of the world’s largest importer of oil.

Meanwhile, the Money market rates dipped on Tuesday as Open Buy Back and Overnight rates fell from  22.33 per cent and 22.93per cent to 15.00per cent and 15.17per cent respectively.

The bond market traded on a slightly bearish note today, particularly towards the long end of the curve.

Consequently, the yields on the 5yr and 7yr benchmark bonds close flat at 12.4per cent and 12.78per cent respectively, while the yield on the 10 year bond saw a five basis points  uptick, printing at 13.15per 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.