Naira appreciates at NAFEX as Nigeria’s external reserve is set to get a boost

The exchange rate between Naira and the US Dollar closed at N409/1$ in the Importers and Exporters window, where forex is traded officially.NAFEX

READ ALSO: Nigeria’s accelerating food inflation shows failure of border closure

Naira gained against the US Dollar at the NAFEX window on Friday to close at N409/$1. This represents a 0.16% gain when compared to N409.65/$1 recorded on Thursday, as the country’s external reserve is set to receive a boost with the planned issuance of $500 million Eurobonds.

Meanwhile, the naira maintained stability at the parallel market on Friday, 9th April, 2021 to close at N485 to a dollar, the same rate as maintained since last week.

Trading at the official NAFEX window

Naira appreciated against the US Dollar at the Investors and Exporters window on Friday to close at N409 to a dollar. This represents a 65 kobo gain when compared to N409.65/$1 recorded on Thursday, 8th April 2021.

  • The opening indicative rate closed at N409.79 to a dollar on Friday. This represents a 71 kobo gain when compared to N410.50/$1 recorded on Thursday.
  • Also, an exchange rate of N420 to a dollar was the highest rate recorded during intra-day trading before it closed at N409/$1. It also sold for as low as N395/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dropped by 41.1% on Friday, 9th April 2021.
  • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined from $93.69 million recorded on Thursday, April 8, 2021, to $55.21 million on Friday, April 9, 2021.

Cryptocurrency NAFEX watch

The world’s most popular digital currency, bitcoin recorded a 3.05% increase in value on Saturday evening, 10th April 2021.

  • Bitcoin went up by 3.05% to trade at $59,907 on Saturday evening, compared to $58,135 recorded at the close of trade on Friday.
  • This is coming after it had risen to $61,222.22 on Saturday, its highest in nearly a month, propelled by talks of constrained new supplies against evidence of wider adoption.
  • Bitcoin (BTC) is up 116% from the year’s low of $27,734 on January 4. It crossed the $60,000 mark for the first time on March 13, hitting a record $61,781.83 on Bitstamp exchange, just after U.S. President Joe Biden signed his $1.9 trillion fiscal stimulus package into law.
  • The digital currency has been widely adopted by many, replacing gold as the global digital-reserve asset.




Naira weakens further as FX turnover declines by 70.95%

Nigeria’s currency, Naira on Wednesday weakened further by 0.12 percent following strong demand for and shortage of dollars at the Investors and Exporters (I&E) Forex window. (FX)

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The foreign exchange daily turnover declined significantly by 70.96 percent to $11.85 million on Wednesday compared with $40.80 million recorded on Tuesday.

Consequently, after trading on Wednesday naira/dollar exchange rate closed at N411.00k as against N410.50k quoted on the previous day at the FX I&E window, data from the FMDQ showed.

Currency traders who participated in the trading on Wednesday maintained bids at between N405.00k and N438.00k/$.

Exchange rate remained flat at N485 at the Bureau De Change (BDC) segment of the foreign exchange market and the parallel market.

Read Also: Improved forex inflow strengthens naira

At the money market, the Nigeria treasury bills secondary market closed on a flat note on Wednesday, with the average yield across the curve remaining unchanged at 3.97 percent, according to a report by FSDH research. Average yields across short-term, medium-term, and long-term maturities closed at 2.40 percent, 3.30 percent, and 5.46 percent, respectively.

The Overnight (O/N) rate decreased by 0.25 percent to close at 13.50 percent on Wednesday as against the last close of 13.75 percent on Tuesday, and the Open Buy Back (OBB) rate decreased by 0.83 percent to close at 12.67 percent from 13.50 percent on the previous day. FX

“We expect money market rates to remain at elevated levels due to a possible OMO auction by the CBN,” analysts at FSDH said.

In the Open Market Operation (OMO) bills market, the average yield across the curve increased by 13 bps to close at 6.46 percent on Wednesday as against the last close of 6.33 percent the previous day.

Selling pressure was seen across medium-term and long-term maturities with average yields rising by 22 bps and 13 bps, respectively. However, the average yield across short-term maturities closed flat at 4.20 percent.

Yields on 15 bills advanced with the 28-Sep-21 maturity bill registering the highest yield increase of 62 bps, while yields on 11 bills remained unchanged.

The Debt Management Office (DMO) has released its FGN Bonds Issuance Calendar for the second quarter of 2021, indicating plans to raise funds in the range of N450 billion-N540 billion to finance the budget deficit over the next three months.

Furthermore, the DMO is expected to offer bonds during the quarter through re-opening of 10-year (N150 billion – N180 billion), 15-year (N150 billion – N180 billion), 25-year (N100 billion – N120 billion), and 30-year (N50 billion – N60 billion) tenors.

FGN bonds secondary market closed on a mildly negative note on Wednesday as the average bond yield across the curve cleared higher by 3 bps to close at 6.80 percent from 6.77 percent on the previous day.

Naira FX


Naira dollar

Naira gains 0.21% at investors window amid low dollar supply

Nigeria’s currency, Naira, on Monday gained 0.21 percent in its value against the dollar, which closed at N409.13k compared to N410.00k closed on Friday at the Investors and Exporters (I&E) forex window.

READ ALSO: N538bn ports revenue shows private sector can generate more for govt

The naira appreciation was attributed to moderation in the demand for the dollars by the end users who buy to meet their import obligations.

Currency traders who participated in the trading on Monday maintained bids at between N400.00k and N410.50k/$, data from the FMDQ show.

The daily foreign exchange market turnover declined by 57.42 percent to $30.84 million on Monday from $72.43 million recorded on Friday.

Exchange rate remained flat at N485 at the Bureau De Change (BDC) segment of the foreign exchange market and the parallel market.

The money market on Monday, the Nigeria Treasury Bills secondary market closed on a flat note, with the average yield across the curve remaining unchanged at 4.22 percent, according to a report by FSDH Research. Average yields across short-term, medium-term, and long-term maturities closed at 2.47 percent, 3.95 percent, and 5.34 percent, respectively.

In the Open Market Operation (OMO) bills market, the average yield across the curve decreased by 6 bps to close at 6.49 percent on Monday as against the last close of 6.55 percent. Buying interest was seen across long-term maturities with average yield declining by 8 bps.

However, the average yields across short-term and medium-term maturities remained unchanged at 4.21 percent and 5.86 percent, respectively.

Yields on 13 bills compressed with the 12-Oct-21 maturity bill recording the highest yield decline of 32 bps, while yields on 12 bills remained unchanged.


Liquidity Naira

Liquidity rises, external reserves grow but naira falls

Nigeria’s currency, Naira, on Thursday weakened against the dollar despite increased liquidity and growing external reserves.

READ ALSO: Agricultural Development Fund is Coming.

After trading on Thursday, the foreign exchange market closed with Naira losing 0.24 percent to the dollar at N409.75k compared to N408.75k closed on Wednesday at the Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

The Naira depreciation was attributed to strong demand for dollars by the end users to meet their import obligations.

Currency traders who participated in the trading on Thursday maintained bids at between N393.00k and N411.40k/$.

The daily foreign exchange market turnover rose significantly by 394.36 percent to $171.84 million on Thursday from $34.76 million recorded on Wednesday.

Nigeria’s external reserves grew by 0.61 percent to $34.62 billion as at March 24, 2021 from $34.41 billion as of March 18, 2021 according to data obtained from the Central Bank of Nigeria (CBN)’s website.

At the end of the Monetary Policy Committee (MPC) meeting on Tuesday, Godwin Emefiele, governor of the CBN noted the committee’s satisfaction over the improvement in the level of external reserves, which he said stood at US$36.46 billion at end-February 2021, compared with US$34.94 billion at end-January 2021.

This, he said reflects the recent upsurge in crude oil prices on the backdrop of the renewed optimism on the successful deployment of COVID-19 vaccines across the globe.

At the black market and Bureau De Change (BDC) segment of the foreign exchange market, Naira remained unchanged on Thursday at N485 and N486 per dollar, respectively.

The Nigerian Treasury Bills secondary market closed on a negative note on Thursday with average yield across the curve increasing by 14 bps to close at 4.04 percent from 3.90 percent on the previous day, according to a report by FSDH research.

Average yield across the medium-term maturities expanded by 47 bps. However, the average yields across short-term and long-term maturities closed flat at 2.06 percent and 5.32 percent, respectively.

Yields on 6 bills advanced with the 16-Sep-21 maturity bill recording the highest yield increase of 75 bps, while yields on 14 bills remained unchanged.

The Overnight (O/N) rate increased by 1.75 percent to close at 15.75 percent on Thursday as against the last close of 14.00 percent on Wednesday, and the Open Buy Back (OBB) rate increased by 2.00 percent to close at 15.50 percent from 13.50 percent on the previous day.



WEEK AHEAD: More of same for naira, Bitcoin rally to continue

More of same for Naira

The Naira closed at N411.88 on the I&E window, a 0.21 per cent depreciation from N411.00 which it closed at the previous session on Friday, according to data from the FMDQ Security Exchange.

READ ALSO: CBN to phase out old cheques March 31

The currency also lost at the parallel market as data posted on, a website that collates parallel market rates, showed that the currency closed at N482.00, a 0.42 per cent depreciation from N480.00 as it exchanged hands on Friday. As a result of this, the spread between the unofficial market and the I&E window exchange rate is pegged at N70.12, which translates to a gap of 14.54 per cent. A look at the data tracked from FMDQ indicated that forex turnover increased from $36.92  million recorded on Wednesday, March 10, 2021, to $192.11 million on Thursday, March 11, 2021, being the highest dollar supply recorded in two weeks. However, the coming week wouldn’t be any different as the Naira is anticipated to continue to fluctuate around the threshold of N406/$1 and N412/$1.

Bitcoin’s bullish trend intensifies

It’s no longer news that the world’s most popular crypto has got its mojo back, but what seems to be news is that leading crypto experts are anticipating that the bullish rally is still in its early stages amid the fact that it has risen more than eighteen folds within a year. The crypto soared higher on Saturday and was trading at $61,050.29 with a daily trading volume of about $60 Billion. Bitcoin is up 23% for the week. It’s currently the most valuable crypto with a market value of $1.14 Trillion.

The flagship crypto’s importance for “commerce on the internet” has also helped its credence among a significant number of millennials globally. Its important to note that the strong holding fundamentals that have kept the flagship crypto above the $55,000 price levels in the past few days are the strong hands that came in to buy this latest dip. Finally, it’s key to note that Bitcoin is becoming very scarce, amid the bias that its present supplies are arbitrarily squeezed by strong institutional buying, as recent data reveal Bitcoin’s supply has been dropping for 12 months. Also, recent developments indicate that Zugacoin Cryptocurrency, founded by a Nigerian, Naira can now be comfortably used to purchase any type of vehicle, motorcycles, plastics and all the other products under the INNOSON Group anywhere in the world. This follows the sealing of a business partnership deal between Archbishop SamZuga of Zugacoin and Chief Dr Innocent Chukwuma of Innoson vehicle manufacturing company on Saturday, March 13, 2021. With these dynamics in play, the week ahead looks promising for the flagship crypto (Bitcoin) amongst others.

Oil prices continue rally

Brent Crude oil on Thursday 11th March 2021 gained momentum as it rose by 2.55% to close at $69.63, indicating a recovery from its slump recorded on Monday and Tuesday. The price of Brent Crude had topped $70 per barrel in the early hours of Monday this week before sliding down on account of the news of an attack by rebel Houthi rebel on the Saudi oil infrastructure on Sunday. The recent increase in oil price can be attributed to OPEC+’s decision to maintain the current production cuts for another month. According to the Foreign Minister of Saudi Arabia, Prince Faisal bin Farhan, while speaking after a meeting with his counterpart from Russia, Sergey Lavrov, the Organisation of Petroleum Exporting Countries is looking for a “fair” price for its crude. Afterward, Lavrov noted that the OPEC+ alliance was strong and there was nothing that could at this point undermine the good working relationship between Russia and Saudi Arabia. This is a strong indication that both parties are in synergy towards ensuring that Crude oil price continues its current bullish run, hence good news for oil in the week ahead.

External reserves on steady dip

Nigeria’s external reserve declined by 0.13% to stand at $34.67 on Wednesday, 10th March 2021 being a record low in 10 months. The country’s external reserve declined from $34.71 billion recorded as of Tuesday, 9th March 2021 to stand at $34.67 billion as of 10th March 2021. Nigeria’s current external reserve position indicates a total loss of $433.68 million in the month of March 2021. With the current unattractive investment environment coupled with the ripple effects of the COVID19 pandemic, Naira FPI’s aren’t likely to be motivated any time soon, hence depletion of our external reserve is most likely to persist in the week ahead.

NSE-30 companies post N1.13trn loss year to date

The top 30 companies listed on the Nigerian Stock Exchange (NSE) known as the NSE-30 have lost a total of N1.13 trillion in market capitalization year to date. The elite list, which consists of the top 30 companies in terms of market capitalization and liquidity, recorded a decline of 6.66% in market capitalisation from N17.00 trillion recorded as of 31st December 2020 to stand at N15.87 trillion as of 12th March 2021.

Dollar Bill

What to expect of CBN “naira for dollar” scheme

What to expect as CBN’s naira for dollar scheme begins
Starting today, March 8, Nigerians who use formal channels to receive dollars from abroad will get 5 naira extra for every $1 they remit through licensed international money transfer operators and commercial banks.

READ ALSO: High demand for OMO bills as yields top 10%

The program will initially run for 60 days, according to the CBN, which is betting on the move to improve dollar liquidity in the official window.
Based on the policy, Deposit Money Banks reached out to their customers on Sunday telling them that N5 would be given for every dollar received by the customers.

Nigeria is turning its attention to diaspora remittances as it seeks to boost dollar inflows into the country after a difficult past year that saw dollar flows dry up on the back of lower oil exports, causing shortages of the greenback.

In December 2020, the CBN also unveiled new rules on remittances allowing people getting cash from friends or family abroad to be paid in US dollars. This marked a divergence from the usual practice of paying in naira which discouraged diaspora inflows via official channels.
Economists say the latest incentive by the CBN to boost diaspora inflows could indeed help direct some dollars through the official channel and ease the pressure on the naira which last traded at N411 per dollar at the investors and exporters window.
The big question on the minds of analysts is the cost implication of the scheme.

New week, old worries for equities
Bearish sentiments again dominated the Nigerian equities market last week, dragging the All Share Index to its fifth consecutive negative close.
The NSEASI shed 1.18% WoW to 39,331.61pts, while the year-to-date return sunk deeper into negative territory, settling at -2.33%.
All sectoral indices closed negative with the exception of the Insurance index which climbed 1.39 percent. MORISON (+20.00%) topped the gainers’ chart, while CHAMPION shed -33.33% to emerge as the week’s biggest loser.
As yields in the fixed income market continue to rise, the equities market is expected to continue to see outflows.
It remains to be seen however if the ongoing corporate earnings season can swing sentiments in favour of embattled stocks.

Mixed corporate earnings
A number of audited financial results were released last week, with mixed performance across board. While Dangote Sugar recorded strong top and bottom-line growth (+33.03% and +33.16% respectively), Ardova Plc managed to grow its revenues (+2.90%), although after-tax profit dipped by 47.30% compared to last year. SEPLAT, on the other hand, recorded declines in both top and bottom-line.
MTN Nigeria also released its 2020 audited financial statements that showed an 8.5 percent increase in operating profits to N426.73 billion, as data revenues surged by 51 percent to N332.37 billion.
This week will see more corporate results and there are expectations that the financial performance of companies in 2020 will reflect the impact of the pandemic on the economy which slipped into a second recession in five years last year.