Naira depreciates by 0.81% to N411.50
Naira at the Investors Exporters Foreign Exchange ( I & E FX) wisdom depreciated by 0.18 per cent to close at N411.50 against the Dollar on Thursday.
While the Naira gained by 0.13per cent and 0.11 per cent against the Pound Sterling and Euro closing at N580.75 and N499.68 respectively.
The local currency had depreciated against the Dollar on Monday to close at N411.07 to a dollar, representing a 0.08per cent loss compared to N410.75/$1 recorded on Friday.
At the parallel market, while the Naira closed flat against the Dollar at N502, it gained 0.33 per cent against the Euro to close at N605. Conversely, the Naira lost 0.70 per cent against the Pound Sterling to close at N715.
However, the Naira remained stable against the Dollar on Monday at the parallel market to close at N502 to a dollar. This was the same rate that was recorded on Friday.
The dollar supply dropped by 34.5per cent as the Central Bank of Nigeria announced an increase of forex allocation to deposit money banks for SMEs, travellers, and others, in order to boost liquidity.
Money market rates were non-directional today as the Open Buy Back rate closed flat at 14.33 per cent, while Overnight rates increased by 17basis points to close at 14.67 per cent.
The bond market traded on a quiet note today with yields remaining unchanged across most maturities.
The yields on the 5-year, 7-year and 10-year benchmark bonds close flat at 12.16 per cent, 12.77 per cent and 12.94 per cent respectively.
“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” analysts at Investment one research said.
Nigeria’s external reserve continued to decline, as it dropped by $21 million on Monday, 7th June 2021 to close at $34.170 billion, representing a 0.06% decline when compared to $34.191 billion recorded on Friday, June 4, 2021.
According to the CBN, foreign reserve has lost about $1.199 billion year-to-date, having recorded declines consecutively for 31 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 and a nation currently burdened by a second wave of the covid-19 pandemic.
