Naira Sinks, Treasury Yield Falls, Bonds Trade Flattish
The Naira on Monday depreciated at the Investors and Exporters foreign exchange (FX) window, exchanging at N419 to the dollar, a 0.48 per cent depreciation, weaker than N417 it traded on Friday.
The open indicative rate closed at N419 to the dollar on Monday. An exchange rate of N423.00 to the dollar was the highest rate recorded within the day’s trading before it settled at N419.00.
The Naira sold for as low as 410.84 to the dollar within the day’s trading. A total of 53.15 million dollars was traded in foreign exchange at the official Investors and Exporters window on Monday.
Amidst Godwin Emefiele’s presidential ambition, the market is expecting the local currency to fall further as uncertainties surround the apex bank chief’s next move. Meanwhile, financial experts said it is a matter of time for naira to be officially devalued due to dollar scarcity amidst rising demand.
In the money market, short term rates adjusted upward following moderate liquidity strain in the financial system. The overnight lending rate expanded by 141 basis points to 6.3%, according to data from FMDQ Exchange.
In a market note, Cordros Capital said trading in the Treasury bills secondary market was bullish, as the average yield contracted by 3bps to 3.7%.
Across the curve, traders’ note shows that the average yield was flat at the short and long ends but contracted at the mid (-10bps) segment due to demand for the 157 day to maturity (-58bps) bill.
Elsewhere, analysts note indicated that the average yield was flat at 4.1% in the open market operation (OMO bills) segment.
In the bond market, trading activities ended with mixed sentiments as the average yield was unchanged at 11.1%. Across the benchmark curve, the average yield pared at the short (-1bp) end as investors demanded the MAR-2024 (-3bps) bond.
However, the average yield inched higher at the long (+1bp) end as investors sold off the APR-2037 (+2bps) bond. The average yield closed flat at the mid-segment. #Naira Sinks, Treasury Yield Falls, Bonds Trade Flattish
Banks’ Provisions for Retail FX Auction Could Pressure Funding Rates
