Naira gains 16.09% in 3days as demand slows

Naira on Wednesday gained 16.09 percent against the dollar in three days, after it lost 36.52 percent of its value in almost 11 months at the parallel market.

The appreciation of naira was attributed to moderation in demand amid increased supply of dollars at the unofficial market.

After trading on Wednesday, the dollar was quoted at an average rate of compared to N890/$ quoted on Friday.

Between Tuesday and Wednesday, the local currency appreciated by 3.91 percent from across the Southern and Northern region of the country.

Naira has been falling in the last few years, depreciating to a peak of N890 per dollar on Friday, from N565/$ at the beginning of the year. This represents 36.52 percent loss over the greenback.

In Lagos Street market, dollars exchanged at between N760 and N780 at the end of trading day from N790 and N810 on Tuesday.

In Kano, it was quoted at N755 per dollar at the close of trading compared to N780/$ quoted on the previous day, while dollar was quoted at N765/$ on Wednesday as against N800 in Abuja.

At the Investors and Exporters (I&E) forex window, Naira appreciated by 0.10 percent as the dollar was quoted at N445.67 on Wednesday as against the last close of N445.75 on Tuesday, data from the FMDQ indicated.

Most currency dealers who participated at the foreign exchange auction on Wednesday maintained bids between N432.00 (low) and N447.09 (high) per dollar.

The daily foreign exchange market turnover increased by 27.95 percent to $93.01 million on Wednesday from $72.69 million recorded on Tuesday, data from the FMDQ indicated.

At the money market on Wednesday, the Overnight (O/N) rate increased by 0.08 percent to close at 8.83 percent as against the last close of 8.75 percent on Tuesday, while the Open Repo (OPR) rate remained unchanged at 8.50 percent.

The Nigerian treasury bills secondary market closed on a flat note on Wednesday with the average yield across the curve closing flat at 11.32 percent, a report by the FSDH research stated. Average yields across short-term and medium-term maturities remained unchanged at 11.87 percent and 8.70 percent, respectively.

However, the average yields across the long-term maturities declined by 1 basis point. NTB September 7, 2023 and NTB October 26, 2023 maturity bills witnessed mild buying interest, with a yield decline of 1 basis point each.

At the Primary Market Auction held on Wednesday, the Central Bank of Nigeria (CBN) offered NT-bills maturities worth N193.04 billion across 91-day (N1.15 billion), 182-day (N2.83 billion), and 364-day (N189.06 billion) tenors.

The Federal Government of Nigeria (FGN) bonds secondary market closed on a flat note on Wednesday, as the average bond yield across the curve closed flat at 14.81 percent. Average yields across short tenor and medium tenor of the curve remained unchanged.

However, the average yields across the long tenor of the curve declined by 1 basis point. The 18-APR-2037 maturity bond was the best performer with a decrease in the yield of 4 bps.

The Debt Management Office (DMO) has released its FGN Bonds offer circular for November 2022 Primary Market Auction, indicating plans to offer FGN bonds worth N225 billion through the re-opening of 10-year FGN APR 2029 (N75 billion), 10-year FGN APR 2032 (N75 billion), and 20-year FGN APR 2037 (N75 billion) tenors. The bond auction is scheduled to hold on November 14, with settlement on November 16.