Naira gains at I&E FX by 0.06% to N385.75/$

The Naira at the Investors & Exporters (I & E) Foreign Exchange window appreciated by 0.06 percent against the dollar to close at N385.75 on Thursday.

However, the Naira lost by 0.22per cent and 0.30 percent against the Euro and Pound to close at N456.34 and N509.98 respectively.

The I & E FX window observed lower volume passing through the market due to tightened system liquidity. Most participants maintained bids between N386 and N383 per dollar.

According to FMDQ Securities, a total of $43.16 million was traded on Thursday at the I & E FX window.

Naira at the Interbank market of the Central Bank of Nigeria (CBN) remained flat at N379.00

At the parallel market, while the Naira remained flat against the Dollar to close at N477, it lost 0.65per cent and 0.54per cent against the Pound and Euro to close at N615 and N555 respectively.

“Going forward, we expect the FX market to be dictated by heightened dollar demand and CBN FX policies,” analysts at InvestmentOne research explained.

Money market rates dropped today as Open Buy Back and Overnight rates declined by 25basis points and 38 basis points to 1.50 percent and two percent respectively.

The decline in rates may have been due to OMO maturities, which could have eased system liquidity.

The bond market was somewhat negative on Thursday, as yields increased particularly at the long end of the curve. We witnessed the yields on the 5yr and 7yr benchmark bonds close flat at 6.35per cent and 7.78 percent respectively, while the yield on the 10yr benchmark bond rose by 20bps to print and nine percent.

“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” they added.

Trading in the NTB secondary market was bullish, as participants looked to cover lost bids at Thursday’s PMA. Thus, the average yield contracted by seven basis points to 1.6per cent.

The FGN bond market closed on a positive note on Thursday, as the average bond yield across the curve cleared lower by three basis points to close at 4.79 percent from 4.82 percent on Wednesday. The average yield across short tenor of the curve declined by five basis points, while the average yield across medium tenor of the curve increased by four basis points.

However, the average yield across the long tenor of the curve remained unchanged. The FGNSB 12-Dece-2020 bond was the best performer with a decline in yield of 46 basis points, while the 23-FEB-2028 maturity bond was the worst performer with an increase in yield of 34 basis points.