Nigerian naira strengthens against dollar at IEW, but stays flat on the streets
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
Nigeria’s domestic currency, the naira, strengthened 0.11 percent against the United States dollar on the Investors and Exporters foreign exchange window of the country currency multiple currency markets, closing at N360.91 to $1 on Wednesday.
On the streets where currencies are unofficially sourced by many Nigerians, the rate remained unchanged from previous sessions, trading at N362 to $1 at what is popularly called the parallel market. The rates followed the injection of $210 million into the FX market by the country’s central bank, with $100 million allocated to the wholesale window and $55 million apiece to the SMEs and invisibles segments of the markets.
Total turnover in the IEW on Wednesday thus rose by 56.32 percent to $252.92 million, traded within the N350-N362.50/$ band.
In the money market, the overnight rate for money expanded by 1,458 bps, closing at 52.58 percent, due to strained liquidity in the absence of any significant inflows.
Proceedings on the Nigerian Treasury Bills market were mixed, as average yield was flat, closing at 13.00 percent once again. Selloffs occurred at the short (+6 bps) end of the curve, with the yield on the 15DTM (+24bps) bill expanding.
Conversely, yield at the mid (-5 bps) and long (-1 bp) segments contracted, driven by demand for the 99DTM (-43 bps) and 190DTM (-190 bps) bills, respectively.
Bearish sentiments returned to the bond market, as average yield rose by 4 bps to 13.65 percent.
Yields expanded at the short (+8 bps), mid (+2 bps), and long (+2 bps) ends of the curve, following selloffs of the JUL-2021 (+14 bps), MAR-2027 (+6 bps), and MAR-2037 (+16 bps) bonds, respectively.