THE NAIRA FALLS MORE AS DOLLAR LIQUIDITY TIGHTENS.

The naira has been a major concern for investor in the exchange market with the way it do fluctuate. Investor looking for a stable day that it will egual with the dollar, but the possibility is far from possible. Dollar is the most spent currency in the world and the most accepted currency, but when compared to naira, it far from it. The rate one dollar is being changed to a naira is just so alarming.

On Thursday, the naira fell slightly against the US dollar, ending at N411.67 to the dollar, down from N411.50/$1 on Wednesday, June 23rd, 2021

On Thursday, June 24, 2021, the parallel market currency rate stayed unchanged for the third consecutive day, ending at N500/$1. On Wednesday, June 23, 2021, this rate was also recorded.

At the official window, the local currency went down as FX liquidity fell by 43.2 percent.

Meanwhile, Godwin Emefiele, Governor of the Central Bank of Nigeria, told investors in the United Kingdom that he expected the genuine value of the naira to be between N430-440 to the dollar, rather than the black-market rate, which ended at around N500/$1.

Following the dollar scarcity, the Naira, Nigeria's currency, sank further on Monday in the official market known as the Investors and Exporters (I&E) FX window, dealers said.

According to FMDQ statistics, the naira fell 0.18 percent after trade on Monday, with the dollar quoted at N425.75 vs N425/$ on Friday.

Most foreign currency market participants who participated in the auction on Monday kept their bids between N413.40 (low) and N444 (high) (high).

The daily market turnover fell 39.7 percent to $47.56 million on Monday, down from $78.86 million on Friday.

The lower foreign exchange turnover indicated that activity in the investors' and exporters' windows decreased in February 2022. The average foreign exchange turnover in February 2022 was US$0.111 billion, a 10.7 percent decline from US$0.125 billion in January 2022, showing decreased liquidity at the window, according to the Central Bank's economic report.

On the parallel market, sometimes known as the black market, the local currency concluded at N615 per dollar, the same amount as last week.

The interbank overnight (O/N) rate remained unchanged at 14.00 percent, while the Open Repo (OPR) rate declined by 0.17 percent to conclude at 13.83 percent, down from 14.00 percent before.

According to FSDH Research, the secondary market for Treasury Bills ended on a sour note on Monday, with the average yield throughout the curve increasing by 38 basis points to 5.73 percent from 5.35 percent the day before.

For short-term, medium-term, and long-term maturities, average yields climbed by 103 basis points, 13 basis points, and 14 basis points, respectively. The strongest selling pressure was felt on the NTB 8-Sep-22 (+277 bps) maturity bill.

In addition, Open Market Operation (OMO) bills concluded on a negative note on Monday, with the average yield throughout the curve clearing higher by 42 basis points to settle at 5.77 percent, up from 5.35 percent the previous day. The average yield for short-term maturities increased by 207 basis points.

The average rates across medium- and long-term maturities, however, stayed constant at 5.18 percent and 5.79 percent, respectively. The OMO 16-Aug-22 (+207 bps) saw selling pressure.

“The inflow from the Federation Account Allocation Committee (FAAC) late Friday could increase demand early this week, albeit little as system liquidity remains constrained, hence yield may turn bullish.” As a result, we encourage investors to trade cautiously and take advantage of attractive bills throughout the curve, as well as corporate offers, Afrinvest Securities Limited analysts stated.