BY BAMIDELE FAMOOFO
In the just concluded week at the parallel market, the Naira maintained dominance at the open market as it edged out the dollar to gain N9 or by 1.21 percent week on week to close at N738/USD from N747/USD in the previous week.
On the other hand, at the investors’ and exporters’ FX window, the Naira lost N0.75 or 0.16 percent week on week to close at N464/USD from N463.25/USD in the face of the unabating FX pressure from FX users while the apex bank seek ways to continue its rates control at the official market.
A look at activities at the Interbank Foreign Exchange Forward Contracts market, the spot exchange rate remained unchanged at N462/USD.
Also, in the analysis of the Naira/USD exchange rate in the weekly Naira FX Forward Contracts Markets, it was the dollar reign across all forward contracts with depreciations reported for the Naira at the 1-Month, 2-Month, 3-Month and the 6- Month Contracts by -0.5 percent, -0.8 percent, -0.5 percent and -0.35 percent respectively to close at offer prices of N469.20/USD, N478.44/USD, N485.89/USD and N513.22/USD week on week.
On the other hand, the Naira gained by 0.6 percent week on week for the 12-Month contract to close at contract offer price of N562.49/USD.
In the oil market last week, oil price movement saw a significant rebound of the commodity price to trade at above $86 per barrel despite recession fears in the US and the probable policy direction of the Fed.
However, on the home front, data from the CBN data bank showed that the Bonny Light crude price surged by 1.23 percent or (USD1.07) week on week, to close at USD87.87 per barrel from USD86.80 per barrel in the previous week amidst the tightening supply due to the Russia-Ukraine war and the market volatility due to price oscillations.
“This week, financial markets analysts expect the naira to trade in a relatively calm band across various market segments barring any market distortion in the face of the Naira scarcity and as the apex bank continues its weekly FX market intervention to defend the value of the naira”
This week, financial markets analysts expect the naira to trade in a relatively calm band across various market segments barring any market distortion in the face of the Naira scarcity and as the apex bank continues its weekly FX market intervention to defend the value of the naira.
At the bond market, the Apex Bank refinanced maturing T-bills worth N149.64 billion in the primary market with stop rates mostly flat for the front and mid-end maturities. Specifically, stop rates for 91- and 182-day bills were unchanged at 6.00 percent and 8.00 percent, respectively.
However, at the longer end of the curve, stop rates moderated slightly, with the 365-day bill’s stop rate declining to 14.70 percent (from 14.74%) due to improved demand. This was evidenced by a bid-to-cover ratio of 1.16x, an increase from 0.53x.
Despite this, yields in the secondary market rose for all maturities tracked, primarily due to persistently tight liquidity conditions. Consequently, NITTY for 1 month, 3 months, 6 months, and 12 months maturities leaped to 5.25 percent (from 4.30%), 6.86 percent (from 5.74%), 8.81 percent (from 7.78%), and 14.50 percent (from 12.97%), respectively, as investors sold their holdings.
