FX pressure worsen as naira hit N1,310/$ on black market
Naira on Tuesday fell to a record low of N1,310 per dollar following strong demand on the parallel market, also known as the black market.
This represents 6.07 percent (N75) weaker than N1,235 recorded at the close of trading on Monday.
Naira on Tuesday lost 6.86 percent after strengthening against the dollar by 1.85 percent on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Wale Edun, the finance minister said Monday that Nigeria expects as much as $10 billion in new foreign currency inflows in the next few weeks to ease acute dollar shortages in the foreign exchange market.
After trading on Tuesday at the NAFEM, one dollar was quoted at N847.77 per dollar, weaker than N793.34 on Monday and N808.27 quoted on Friday, data from the FMDQ showed.
Willing buyers and willing sellers offered and sold at a bid rate of N900/$ high and N700/$ low. The daily FX market turnover increased by 8.03 percent to $88.10 million on Tuesday from $81.55 million recorded on Monday and $79.26 million recorded on Friday at the official market.
Analysts said that Nigeria’s currency will stabilise in the short term if the expected $10 billion flows through the economy.
Foreign exchange reserves have risen by 0.18 percent in the last one week to $33.28 billion as of October 23, 2023 compared to $33.22 billion on October 13, 2023, data from the CBN website indicated.
At the money market on Tuesday, the Nigeria treasury bills (NT-Bills) secondary market closed on a flat note with the average yield across the curve remaining unchanged at 6.36 percent, according to a report by the FSDH. Average yields across short-term, medium-term, and long-term maturities remained unchanged at 3.26 percent, 4.91 percent, and 8.76 percent, respectively.
The CBN is scheduled to conduct a Primary Market Auction on Wednesday, to roll over NT-bills maturities worth N108.13 billion across 91-day (N2.85 billion), 182-day (N7.95 billion), and 364-day (N97.33 billion) tenors.
The Open Market Operation (OMO) bills market closed on a mildly positive note on Tuesday, as the average yield across the curve cleared lower by 1 basis point to close at 12.04 percent from 12.05 percent on the previous day.
The average yield across the long-term maturities declined by 1 basis point. OMO bill for August 6, 2024 (-1 basis point) maturity bill witnessed mild buying interest, the report noted.
