Naira drops at parallel, official window trades at N363/$1 as players anticipate tighter liquidity on Thursday
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
The Nigerian naira fell by 0.28 percent and 0.14 percent when it exchanged for N363 and N361.14 to one United States dollar on the parallel market and Importers & Exporters forex (I&E) window, respectively on Wednesday.
These were in contrast to N362 traded in the parallel market, and N360.64 at the I&E FX window, respectively on Tuesday.
Total trades in the I&E FX window decreased by 6.67 percent to $187.11 million, consummated within the N314.50-N363/USD band.
At the fixed income and money market, the overnight lending rate expanded by 115 basis points (bps) to 7.75 percent, in the absence of any significant inflows to the market to support liquidity.
Proceedings in the NTB market were bearish, as market players anticipated tighter liquidity ahead of Thursday’s expected OMO auction. Consequently, average yield increased by 33 bps to 11.77 percent.
Selloffs occurred across all ends (short: +38 bps; mid: +21 bps; and long: +40 bps) ends of the curve, with the 85DTM (+141 bps), 120DTM (+105 bps), and 204DTM (+114 bps) bills recording significant expansions.
Bearish sentiments prevailed in the bond market, as average yield rose by 11 bps to 13.02 percent. Selloffs of the JAN-2022 (+9 bps), JAN-2026 (+34 bps), and JUL-2030 (+29 bps) papers led to yield expansion at the short (+2 bps), mid (+12 bps), and long (+20 bps) ends of the curve.