- Fixed income market upbeat
The naira traded at N455 to the dollar on the Nigerian street currency market on Thursday as the American green back recorded a gain of 2.25 percent over the domestic currency so far this week.
At the Importers’ and Exporters’ window of the country’s opaque foreign exchange market, the domestic currency weakened by 0.04 per cent with the dollar quoted at N386.17, compared to N386.00 the previous trading day.
At the bureau de change (BDC) market, the dollar exchanged for N453.
Meanwhile, most market participants maintained bids between N383.00 and N386.50 to the United States dollar.
Money & Fixed Income Market
In the money market, the Overnight (O/N) and the Open Buy Back (OBB) rates declined by 0.18 per cent and 0.10 per cent to close 2.20 per cent as against the last close of 2.38 percent, and at 1.40 per cent from 1.50 per cent on the previous day respectively.
The Nigerian T-Bills market closed on a positive note with average yield across the curve declining by 8 basis points to close at 1.80 per cent from 1.88 per cent on the previous day. The average yield across long-term maturities was compressed by 22 basis points, while average yields across short-term and medium-term maturities remained unchanged. Maximum buying interest was seen in the NTB 26-Aug-21 (-33 bps), NTB 29-Jul-21 (-28 bps), and NTB 15-Jul-21 (-23 bps) maturity bills.
At the Primary Market Auction held on Wednesday, the CBN sold NT-Bills worth N128.06 billion across the 91-day (N4.41 billion), 182-day (N14.00 billion), and 364-day (N109.65 billion) tenors. The stop rates for the 91-day, 182-day, and 364-day tenors cleared lower at 1.10 per cent (-5 bps), 1.55 per cent (-25 bps), and 3.05 per cent (-29 bps), respectively. The auction was significantly oversubscribed by 105 per cent, with bid-to-cover ratios settling at 1.95x (91-day), 1.64x (182-day), and 2.11x (364-day).
However, in the OMO bills market, the average yield across the curve declined by four basis points (bps) to close at 2.50 per cent Thursday, as against the last close of 2.54 per cent the previous day. Buying interest was witnessed across short-term, medium-term, and long-term maturities with average yields falling by 1bps, 8bps, and 6bps, respectively.
Meanwhile, the 2-Mar-21 maturity bill registered the highest yield decline of 75 basis points, while the 15-Oct-20 maturity bill recorded the highest yield increase of 16 basis points.
On the back of the recently released information on Nigeria’s total public debt stock rising to N31.01 trillion by the DMO, the FGN bond market closed on a positive note on Thursday, as the average bond yield across the curve cleared lower by 28 basis points to close at 4.22 per cent from 4.50 per cent on the day before. Average yields across short, medium, and long tenor of the curve declined by 19 basis points, 67 basis points, and 36 basis points, respectively. The 27-APR-2023 maturity bond was the best performer with a decline in yield of 71 basis points, while the 23-JUL-2030 maturity bond was the worst performer with an increase in yield of 23 basis points.