Nigerian naira breaks 15-day trend, gains against the US dollar on the streets
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
Nigeria’s domestic currency, the naira, strengthened 0.28 percent Thursday against the United States dollar on the streets where many Nigerians unofficially sourced their foreign exchange. The currency traded at N361 to $1 against 15 previous sessions rate of N362 to $1 at what is popularly called the parallel market.
At the Investors and Exporters foreign exchange window, the naira however weakened by 0.11 percent closing at N361.30 to $1 when compared to N360.91 to $1 recorded on Wednesday.
Total turnover in the IEW on the day dipped by 16.18 percent to $211.99 million from $252.92 million recorded previously and were traded within the range of N359-N362/$.
At the interbank segment of the money market, the overnight rate crashed to 15.25 percent, representing a 3,733 bps contraction, following inflows of OMO bills, worth N183.27 billion, and in the absence of OMO auction in the week.
Proceedings on the Nigerian Treasury Bills market were bearish, as average yield rose by 3 bps to 13.02 percent. Selloffs of the 7DTM (+77 bps) and 105DTM (+37 bps) bills led to yield expansion at the short (+3 bps) and mid (+5 bps) ends of the curve, while demand for the 231DTM (-33 bps) bill led to yield contraction at the long (-2 bps) segment.
At the bond market, transactions turned bullish, as yield contracted by 6 bps on average, to 13.59 percent. The short (-28 bps) end of the curve experienced demand pressure, with the FEB-2020 (-104bps) bond recording a significant contraction. Conversely, yields at the mid (+6 bps) and long (+3 bps) segments expanded, on the back of selloffs of the FEB-2028 (+26 bps) and MAR-2036 (+9 bps) bonds, respectively.