Naira Hits Low as Markets Watch T-Bills Yield Falling
The Nigerian local currency, naira, hit the bottom again at the Investors and Exporters foreign exchange window, depreciated by 0.18% to N417.00 amidst obvious foreign currencies shortage.
A similar development was seen at the parallel market where traders sold the local currency for N585 per unit of United States dollar, shedding N1 from Friday’s close of N585.
In the Nigerian Treasury bills secondary market, trading activities was somewhat quiet with pockets of trades seen across the tenors, according to Alpha Morgan Capital. Consequently, the average yield dropped by 5 basis points to close at 3.17%.
Across the curve, Cordros Capital analysts said in a note that the average yield was flat at the short end, expanded at the mid (+17bps) segment as market participants sold off the 142-day to maturity (+16bps) bill but contracted at the long (-30bps) end following increased demand for the 247-day to maturity (-79bps) bill.
Elsewhere, the average yield was unchanged at 3.6% in the open market operation (OMO Bills) segment amidst declining spot rates at the primary market auction.
Participants at the money market space feels the impacts of lower liquidity in the financial system today despite the inflow from OMO maturity worth N42 billion. READ: Yield Rises Moderate as Nigerian T-Bills Trades Quiet
The average interbank rate climbed by 200 basis points or 2 percentage points to close at 11.34%, separate traders’ notes show. Market data shows that open Buy Back and overnight rate both climbed by 200 basis points to close at 11.00% & 11.67%, respectively.
After Debt Management Office (DMO) opened the week with N150 billion reopening bonds that were heavily subscribed, trading activities at the FGN bond secondary market ended on a bearish note on Tuesday.
Traders said sell-side pressures were seen across all ends of the curve. As a result, the average yield climbed by 16 basis points to close at 10.60%, rising from 10.44 yesterday.
Cordros analysts note shows that across the benchmark curve, the average yield expanded at the short (+4bps) and long (+1bp) ends following sell pressures on the JAN-2026 (+11bps) and APR-2037 (+9bps) bonds, respectively. Conversely, the average yield was unchanged at the mid-segment.
Meanwhile, activities at the FGN Eurobond market ended today on a calm note. The average yield remained flattish at 7.80%, analysts said there will be more Eurobond issuance in 2022. #Naira Hits Low as Markets Watch T-Bills Yield Falling
