Naira fell Against Dollar at Official Market Amid Decrease in Bank Foreign Exchange (FX) Sales on Thursday.
The volume of dollars exchanged between banks, willing buyers, and willing sellers declined by 6.13 percent to $321.23 million on Thursday, down from $342.22 million reported on Wednesday.
After trading on Thursday, the naira depreciated by 4.10 percent as the dollar was quoted at N1,479.47, compared to N1,418.78 quoted on Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ.
The intraday high closed at N1,504 per dollar on Thursday, showing strength compared to N1,510 on Wednesday. However, the intraday low weakened to N946.82 per dollar, down from N896.28/$1 recorded on Wednesday.
On Thursday, the Nigerian Treasury Bills (NT-Bills) secondary market concluded on a negative note at the money market, with a report from FSDH research indicating a surge in average yields across the curve.
The report highlighted that the average yield surged by 261 basis points (bps) to reach 14.99 percent, compared to the previous day’s 12.38 percent. Notably, short-term and medium-term maturities experienced significant expansions of 572 bps and 509 bps, respectively, while long-term maturities saw a slight decline of 11 bps. Heavy selling pressure was observed on the NTB for the March 7, 2024 maturity bill (+634 bps), contrasting with buying interest noted on the NTB for August 8, 2024 (-53 bps).
In line with market activities, the Central Bank of Nigeria (CBN) conducted its scheduled Primary Market Auction on February 7, selling NT-Bills valued at N1,000.00 billion across different tenors.
Despite the higher stop rates, the auction witnessed robust demand, with a 98 percent oversubscription. The bid-to-cover ratios settled at 0.20x (91-day), 0.38x (182-day), and 3.11x (364-day), indicating strong investor appetite.
Meanwhile, the Open Market Operations (OMO) bills market concluded with a slight positive sentiment, as the average yield across the curve decreased by 1 basis point to close at 10.07 percent. Additionally, long-term maturities witnessed a marginal decline of 1 basis point, with mild buying interest observed on the OMO 10-December 2024 maturity bill.
These developments highlight the dynamic nature of Nigeria’s debt market, with investors closely monitoring yield fluctuations amidst evolving economic conditions.