Naira strengthens against dollar at parallel market

While the naira depreciated week-on-week against the United States dollars greenback at the interbank market by 0.09 per cent to N282.25/$1, it remained steady at N345 at the parallel market.

The local currency strengthened against the United State greenback by 0.85 per cent to N352/$1 at the parallel market.  The parallel market was also quiet as the naira was stable, trading at N352/$1 on all days of the week.

This week, analysts anticipate stability in the foreign exchange rate amid foreign portfolio investments in local fixed income instruments. They also expressed the belief that the ability of the CBN to fulfil the $3.5 billion forward commitments in June would massively boost confidence levels in the Nigerian FX market.

According to Financial experts, the market is expected to stay soft in the week ahead in the absence to autonomous supplies and guided trading band in the new interbank market.

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Similarly, the Nigerian Interbank Offered Rate (NIBOR) for overnight funds and 1 month tenor bucket increased to 7.79 per cent (from 4.42%) and 10.96 per cent (from 10.82%) respectively. However, NIBOR for three months and six months placement tenors moderated to 13.14 per cent (from 13.62%) and 14.79 per cent (from 15.29%) respectively.

Meanwhile, yields on the Nigerian Interbank True Treasury Bills Yield (NITTY) mostly increased on sell pressure–yields on the 1 month, 3 months and 6 months maturities increased to 8.06% (from 7.72%), 10.50% (from 9.77%) and 10.54% (from 10.30%) respectively, according to Cowry Asset Management Limited. However, 12 months NITTY moderated to 12.46 per cent (from 13.38%).

There was a treasury bills auction on Friday where N28 billion, N42 billion and N120 billion of the 91-day, 182-day and the 364-day bills were auctioned at 9.98 per cent, 12.24 per cent and 14.99 per cent stop rates.

The proposed allotment by the central bank was twice the offer amount, implying a significant liquidity mop-up from the system. Also, the average treasury bills rate remained at last week’s 9.4 per cent as investors awaited the central bank’s treasury bills auction.