Nigeria’s currency, Naira, on Thursday weakened against the dollar despite increased liquidity and growing external reserves.
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After trading on Thursday, the foreign exchange market closed with Naira losing 0.24 percent to the dollar at N409.75k compared to N408.75k closed on Wednesday at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.
The Naira depreciation was attributed to strong demand for dollars by the end users to meet their import obligations.
Currency traders who participated in the trading on Thursday maintained bids at between N393.00k and N411.40k/$.
The daily foreign exchange market turnover rose significantly by 394.36 percent to $171.84 million on Thursday from $34.76 million recorded on Wednesday.
Nigeria’s external reserves grew by 0.61 percent to $34.62 billion as at March 24, 2021 from $34.41 billion as of March 18, 2021 according to data obtained from the Central Bank of Nigeria (CBN)’s website.
At the end of the Monetary Policy Committee (MPC) meeting on Tuesday, Godwin Emefiele, governor of the CBN noted the committee’s satisfaction over the improvement in the level of external reserves, which he said stood at US$36.46 billion at end-February 2021, compared with US$34.94 billion at end-January 2021.
This, he said reflects the recent upsurge in crude oil prices on the backdrop of the renewed optimism on the successful deployment of COVID-19 vaccines across the globe.
At the black market and Bureau De Change (BDC) segment of the foreign exchange market, Naira remained unchanged on Thursday at N485 and N486 per dollar, respectively.
The Nigerian Treasury Bills secondary market closed on a negative note on Thursday with average yield across the curve increasing by 14 bps to close at 4.04 percent from 3.90 percent on the previous day, according to a report by FSDH research.
Average yield across the medium-term maturities expanded by 47 bps. However, the average yields across short-term and long-term maturities closed flat at 2.06 percent and 5.32 percent, respectively.
Yields on 6 bills advanced with the 16-Sep-21 maturity bill recording the highest yield increase of 75 bps, while yields on 14 bills remained unchanged.
The Overnight (O/N) rate increased by 1.75 percent to close at 15.75 percent on Thursday as against the last close of 14.00 percent on Wednesday, and the Open Buy Back (OBB) rate increased by 2.00 percent to close at 15.50 percent from 13.50 percent on the previous day.
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