Naira trades stable at parallel markets while money market rates surge as CBN mops up N291bn via OMO

The Nigerian naira closed flat at N363 to the United States dollar Thursday at the parallel market, while it depreciated marginally by 0.06 percent to N361.36 at the Investor and Exporter (I&E) FX window.

Total volume sold in the I&E FX window rose by 167.41 percent to $500.37 million (highest since 5th April), consummated within the N314.50-N363/$ band.

The overnight lending rate at the fixed income and money market surged 1,113 bps to 18.88 percent (highest since 27th March, 2018), as the CBN mopped up N290.92 billion via OMO auction.

The apex bank sold a total of N454.16 billion — N2.98 billion of the 119DTM and N451.18 billion of the 231DTM — worth of bills at respective stop rates of 11.05 percent and 12.15 percent.

Sentiments were bearish in the NTB secondary market, following an increase in offer yields of long dated bills at the OMO auction from 12.00 percent to 12.15 percent. Consequently, average yield rose by 41 bps to 12.18 percent. Selloffs of the 91DTM (+109 bps), 133DTM (+112 bps), and 231DTM (+125 bps) bills led to yield expansion at the short (+46 bps), mid (+34 bps), and long (+43 bps) ends of the curve.

Similarly, bearish sentiments persisted in the bond market, as yield rose by 2 bps on average, to 13.05 percent. Selloffs of the JAN-2022 (+18 bps) and MAR-2024 (+27 bps) bonds led to yield expansion at the short (+6 bps) and mid (+6 bps) segments. Conversely, there was demand pressure at the long (-8 bps) end of the curve, with the MAR-2036 (-21 bps) bond recording the largest contraction.

Admin