Nigerian naira trades flat against US dollar at unofficial parallel market

The Nigerian naira closed flat against the United States dollar at the parallel foreign exchange (FX) market on Thursday at N362, but appreciated by 0.01 percent to N360.46 at the official Importers and Exporters (I&E) FX window.

Growth in total turnover in the I&E FX window turned negative by 48.87 percent to $185.36 million, traded within the N345-N363/USD band.

On Wednesday the Nigerian Central Bank (CBN) injected $210 million into the FX market, allocating USD100 million to the wholesale window, and USD55 million apiece to the SMEs and invisibles segments.

At the fixed income and money market, the overnight lending rate expanded 279 bps to 5.00 percent, as the CBN mopped up Thursday’s inflows —with an Open Market Operation (OMO) amounting to N186.68 billion and treasury bills worth N190.84 billion via OMO auction.

CBN sold a total of N600.00 billion comprising of N175.49 billion of the 105DTM and N424.51 billion of the 245DTM — worth of bills at respective stop rates of 11.00 percent and 12.10 percent.

Cordros research analysts observe that sentiments were slightly bearish in the NTB secondary market, following announcement of the OMO auction. Consequently, average yield rose by 1 bp to 11.17 percent. Selloffs of the 105DTM (+44 bps) and 273DTM (+41 bps) bills led to yield expansion at the mid (+6 bps) and long (+3 bps) ends of the curve. Conversely, yield at the short (-6 bps) segment contracted on the back of demand for the 84DTM (-87 bps) bill.

Downward looking sentiments also prevailed in the bond market, as yield rose by 7 bps on average, to 12.74 percent. There were sell pressures at the short (+6 bps), mid (+10 bps), and long (+6 bps) ends of the curve, with the JUN-2019 (+24 bps), JAN-2026 (+22 bps), and JUL-2030 (+15 bps) bonds recording the largest expansions, respectively.

By Adesola Afolabi