Nigeria’s currency on Thursday maintained stability at N474 and N475 per dollar on the black market and retail Bureau segment of the foreign exchange market.
The foreign exchange market continues to experience significant pressures as a result of low oil prices and remittances occasioned by the COVID-19 pandemic.
At the Investors and Exporters (I&E) forex window, Naira gained N0.21k over the dollar, which was trading at an indicative rate of N386.04k on Tuesday as against N386.25k opened with on Monday, data from FMDQ showed.
The exchange rate at the I&E window has been witnessing a shortage in the dollar supply since March 2020, reflecting the pressure on foreign reserves. Naira weakened by 0.13 percent as the dollar was quoted at N386.00 on Monday compared to N385.50 quoted on the previous day.
Most participants maintained bids between N380.00 and N387.00 per dollar, analysts at FSDH research said.
Festus Adenikinju, a member of the Monetary Policy Committee (MPC) noted in his personal statement that the foreign exchange market continues to experience significant pressures as the exchange rate of the naira to the US dollar rose from N443.89/US$ in May 2020 to N447.71/US$ in June 2020 at the BDC window, and from N386.17/US$ to N386.39/US$ at the Investors’ and Exporters’ (I&E) window. The depreciation in both markets is driven by both fundamental factors and speculative activities of economic agents. External reserves decreased from US$36.49 billion in May 2020 to US$35.77 billion by end-June 2020, also current account balance as a share of GDP stood at -4.25% in Q1 2020.
The Central Bank of Nigeria (CBN) on Wednesday conducted its scheduled Primary Market Auction offering NT-bills worth N56.78 billion across 91-day (N19.78 billion), 182-day (N10.00 billion), and 364-day (N27.00 billion) tenors.
A report by FSDH research showed that the NT-Bills market closed on a flat note on Wednesday with average yield across the curve remaining unchanged at 1.71 percent.
The Open Market Operation (OMO) bills market closed on a positive note with average yield across the curve declining by 5 bps to close at 4.18 percent.