Nigeria’s naira down 0.28% at parallel market as CBN mops up N215.98bn via OMO

By Adesola Afolabi

The Nigerian naira was down 0.28 percent against the United States dollar at the unofficial street currency market on Thursday trading at N362 to $1. But it appreciated marginally by less than one basis point at N360.94 to $1 at the importer and exporter (I&E) official foreign exchange window.

Total turnover in the I&E Window dipped further by 28.92 percent to $138.87 million, consummated within the N355-N362/$ band as against N315-N363.10/$ traded previously.

At the inter-bank money market, overnight lending rate expanded 25 bps to 3.58 percent, as the CBN mopped up part of Thursday’s inflow of OMO worth N215.98 billion in bills via OMO auction.

The apex bank sold a total of N191.38 billion — N495 million of the 112DTM and N190.88 billion of the 238DTM, worth of bills at respective stop rates of 11.05 percent and 12.15 percent.
Bearish sentiments were sustained in the NTB secondary market, following the liquidity mop-up, as average yield rose by 5 bps to 12.85 percent.

Selloffs of the 7DTM (+210bps) and 252DTM (+56 bps) bills led to yield expansion at the short (+15 bps) and long (+5 bps) ends of the curve.
Conversely, yield at the mid (- 6 bps) segment declined, following demand for the 98DTM (-118 bps) bill.

Proceedings in the bond market were mixed, albeit with a bullish bias, as yield moderated by 2 bps on average, to 13.29%.
Demand for the JUN-2019 (-51 bps) and MAR-2027 (-6 bps) bonds led to yield contraction at the short (-9 bps) and mid (-1 bp) segments. Conversely, there was sell pressure at the long (+5 bps) end of the curve, with the APR-2037 (+7 bps) bond recording the largest expansion.