Naira depreciates by 0.21% at I &E EX window

Naira at the Investors & Exporters Foreign Exchange (I & E FX) depreciated by 0.21 per cent to close at N394.17 against the dollar on Wednesday.

Also, Naira closed up by 2.93per cent and 3.15 per cent against the Euro and Pounds to print at N475.63 and N535.84 respectively.

According to FMDQ Exchange, investors and exporters traded $89.50million turnover on Wednesday.

FMDQ Exchange had said on Tuesday that a total foreign exchange turnover of $26.83 million was traded by investors and exporters as against $69.00million traded on Monday.

At the parallel market, while the Naira closed flat against the EUR and USD at N580 and N475 respectively, it gained 0.46% against the GBP to close at N645.

However, naira traded flat at N379.00 against the dollar at the Central Bank of Nigeria (CBN) on Wednesday.

Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies.

The overnight lending rate expanded by 50basis points to one per cent, in the absence of any significant inflows into the system.

Activities at the NTB secondary market were bearish, as average yield expanded by nine basis points to 0.5per cent.

Across the curve, average yield expanded at the mid (+one basis point) and long (+19 basis points) segments, following sell-off of the 141DTM (+10 basis points) and 358DTM (+55 basis points) instruments, respectively.

Conversely, average yield contracted slightly at the short (-one basis point) end, as market participants bought up the 85DTM (-four basis points) instrument. Similarly, average yield expanded by two basis points to 0.8per cent at the OMO secondary market.

Mixed sentiments ensued in the Treasury bonds secondary market as investors were focused on the activity at the primary market.

Thus, average yield expanded slightly by 1bp to 6.6%. At the PMA, the DMO offered instruments worth NGN150.00 billion to investors through three re-openings – 16.288% MAR 2027 (Bid-to-offer: 1.8x; Stop rate: 7.9800%), 12.50% MAR 2035 (Bid-to-offer: 2.1x; Stop rate: 8.7400%) and 9.80% JUL 2045 (Bid-to-offer: 0.8x; Stop rate: 8.9500%).

Despite a total subscription of NGN238.27 billion, the DMO eventually allotted instruments worth N122.36 billion, resulting in a bid-cover ratio of 1.9x.