Nigerian naira trades lower on Monday

The dollar to naira rate depreciated by 0.04 percent as the Naira settled at N360.91 in the I&E FX window, while it remained flat at N362 in the parallel market on Monday.

Total turnover in the I&E FX window inched lower by 0.65 percent to $232.68 million. This is just as the apex bank injected $349.34 million into the Retail Secondary Market Intervention Sales (SMIS) on Friday.

At the fixed income and money market, the overnight lending rate spiked 483 bps to 8.17 percent, from 3.33 percent last Friday, following outflows for FX sales ­— $349.34 million was sold at the Retail Secondary Market Intervention Sales (SMIS) — by the CBN.

Activities in the treasury bills market were mixed, albeit with a bearish bias, weighed by the squeeze in system liquidity. Consequently, average yield expanded marginally (+1 bp), to close at 11.30 percent. Yields expanded at the short (+1 bp) and mid (+12 bps) ends of the curve, driven by selloffs of the 73DTM (+81 bps) and 108DTM (+41 bps) bills, respectively. Conversely, the long (-17bps) segment experienced demand pressure, with the 213DTM (-191 bps) bill recording a significant contraction.

The bond market was bearish, with average yield inching upwards by 4 bp to 12.92%. The short (+15 bps) segment experienced sell pressure, with the FEB-2020 (+63 bps) bond recording a significant expansion. Conversely, yields at the mid (-1 bps) and long (-3 bps) ends contracted, driven by demand for the MAR-2027 (-3 bps) and JUL-2034 (-9 bps) bonds, respectively.