Even with heightened dollar liquidity, the Naira reached a historic low of N996.75 per dollar in the official foreign exchange (FX) market, marking a 13.95% depreciation from the previous day’s rate of N874.71/$1 on Wednesday.
Additionally, it was 2.93% weaker than the N993.82/$1 rate recorded on October 30, 2023, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), as reported by data from FMDQ.
Despite a substantial supply of dollars from both buyers and sellers in the FX market, the Naira’s value remained under pressure due to heightened demand for dollars.
As a result, the daily FX market turnover surged by 101.32%, reaching $228.54 million on Thursday, compared to $113.52 million recorded on Wednesday.
The spot rate reached as high as N1,100 per dollar on Thursday, showing weakness compared to the N1,097.50/$1 rate on Wednesday and the N744/$1 low rate, which was slightly weaker than the N745.00/$1 spot rate quoted on the previous Wednesday.
In the parallel market, also known as the black market, the Naira saw a 1.75 percent gain against the dollar on Thursday, as speculators adopted a cautious stance in anticipation of government initiatives to boost dollar supply.
Nigeria’s government aims to enhance dollar supply through an expected $10 billion investment to digitize FX transactions, discouraging speculative demands and the accumulation of cash in foreign exchange.
Meanwhile, at the money market, the Nigerian Treasury bill (NT-Bills) secondary market closed positively, witnessing a decline in the average yield across the curve by 103 basis points to 13.37 percent from the previous day’s 14.40 percent, as reported by FSDH Research.
The average yields across short-term, medium-term and long-term maturities decreased by 199 bps, 185 bps, and one basis point. NTB January 25, 2024 (-405 bps) maturity bill witnessed maximum buying interest.
The Central Bank of Nigeria (CBN) held its scheduled Primary Market Auction on Wednesday, November 8, selling NT-Bills worth N497.20 billion across the 91-day (N4.52 billion), 182-day (N5.44 billion), and 364-day (N487.24 billion) tenors. The stop rates for the 91-day, 182-day, and 364-day tenor cleared higher at 7.00 percent (+110 bps), 11.00 percent (+200 bps), and 16.75 percent (+375 bps), respectively.
The auction was heavily oversubscribed by 182 percent, with bid-to-cover ratios settling at 3.55x (91-day), 6.06x (182-day), and 2.75x (364-day), the report stated.
