Foreign reserves decline to $35.92bn as naira gains N1.50k
Nigeria’s foreign res e r ves declined by $59.86 million week-todate to $35.92 billion as foreign exchange (FX) outflows continue to surpass inflows.
The price of Brent crude has improved to $44.42 per barrel as at August 03, 2020 from as low as around $20 per barrel in March this year. Oil accounts for more than 60 percent of government revenue and about 90 percent of the country’s foreign exchange earnings.
Naira gained N1.50k as the dollar was quoted at N388.00k on Monday from N389.50k quoted on Wednesday last week at the Investors and Exporters (I&E) forex window, data from FMDQ indicated.
The market observed lower volume of transaction due to tightened system liquidity. Analysts at FSDH research said most participants maintained bids between N380.00 and N392.50 per dollar.
Daily foreign exchange turnover declined further by 8.49 percent to $17.23 million on Monday from $18.83 million recorded on Wednesday last week.
Earlier on Monday morning, the market signaled appreciation in the value of Naira with an indicative rate of N388.33k compared to N388.61k opened with on Wednesday before the holiday.
The foreign exchange market resumed activity on Monday morning after the two day holiday, with
Nigeria’s currency stable at N474 per dollar on the black market.
Dollar was trading as high as N475 in some parts of Lagos where the black market operators are operating. The local currency was also stable at the retail Bureau with the dollar trading at N475, since Tuesday last week.
At the money market, the average Nigerian treasury bills yield remained unchanged at 1.75 percent across the curve. The Open Market Operation (OMO) bills market closed on a positive note with average yield across the curve declining by 18 bps to close at 4.05 percent.
The Overnight (O/N) rate increased by 12.23 percent to close at 14.33 percent on Monday. The Open Buy
Back ( OBB) rate also increased by 11.93 percent to close at 13.33 percent.
The CBN held its scheduled Primary Market Auction on July 29, selling NT- Bills worth N265.96 billion across the 91- day (N49.84 billion), 182-day (N54.59 billion), and 364day (N161.52 billion) tenors. The stop rates for the 91day, 182-day, and 364-day tenors cleared at 1.200 percent (-10 bps), 1.500 percent (-30 bps), and 3.400 percent (+5 bps), respectively.
The auction was oversubscribed by 76 percent with bid-to-cover ratios settling at 1.89x (91-day), 2.91x (182-day), and 1.33x (364day). The auction witnessed an increased subscription, especially in 182-day bills, due to excess liquidity in the market.
Kayode Alabi (l), deputy governor and chairman of Kwara State technical committee on COVID-19, presenting ace masks to Bisola Ahmed, commissioner for Education and Human Capital Development, for distribution across schools ahead of resumption of students preparing for Senior Secondary School Certificate Examinations, in Ilorin yesterday.