Naira trades flat against US dollar at parallel market

Temitope Adebayo

The Nigerian currency, naira, on Wednesday traded flat at N362 against the dollar at the unofficial segment of the foreign exchange market (parallel market).At the close of yesterday trading activities, the local currency weakened by 0.05 per cent against the dollar to N362.60/dollar at the Investors & Exporters Foreign Exchange (I&E FX) window.

According to the FMDQ OTC Securities Exchange, a total of $263.45 million turnovers was reported at the specialized foreign exchange window created by the Central Bank of Nigeria (CBN) for exporters and importers.

However, the overnight lending rate increased marginally by 75basis points to 14.17per cent, on the back of strained liquidity, which is estimated at N35.80 billion.

Activities in the Treasury bills market sustained its bullish trend, as the average yield dipped by two basis points to 4.44 per cent. Yields contracted at the short (-40 basis points) end of the curve, following buying interests in the 15DTM (-15 basis points) instrument.

Elsewhere, average yield expanded by 31bps to close at 13.11per cent at the Open Market Operation (OMO) bills secondary market.

At Wednesday’s NTB primary action, the CBN fully allotted N225.45 billion worth of bills – N5.85billion of the 91- day, N26.60 billion of the 182-day and N193.00 billion of the 364-day – at respective stop rates of 2.95per cent (previously 3.50 per cent), 3.95 per cent (previously 4.90 per cent), and 5.09 per cent (previously 5.20 per cent).

Trading in the Treasury bonds market was bearish, as the average yield increased by three basis points to 10.27 per cent.

Yields expanded across the short (+6bps), mid (+one basis point) and the long (+two basis points) segments of the curve, following sell-offs of JAN-2022 (+28 basis points), MAR-2027 (+three basis points) and JAN-2034 (+24 basis points) bonds, respectively.