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Naira appreciates despite forex turnover decrease and black market depreciation

EditorPollock Mondal
Published 11/01/2023, 10:25 AM
Updated 11/01/2023, 10:25 AM

On Tuesday, the Nigerian naira showed a significant appreciation of 21.81%, closing at an official rate of N815.32/$1, up from N993.82/$1 the previous day. This change was accompanied by intraday figures that ranged between a high of N998.00/$1 and a low of N6475.00/$1, marking a spread of N523/$1.

Despite this appreciation, Tuesday also saw a substantial decrease in forex turnover by 66.01% to $881.31 million. The black market also experienced a 2.54% depreciation with rates of N1180/$1 and peer-to-peer traders at N1165.23/$1.

Data from FMDQ revealed that the black market exchange rate for the naira remained stable on Wednesday following a 2.5 percent appreciation against the US dollar on Monday. Despite low liquidity, trading on the Nigerian Association of Foreign Exchange Members (NAFEM) saw the naira strengthen by 17.96 percent, with the dollar quoted at N815.32, a significant improvement from Monday's N993.82 quote.

However, the daily forex market turnover dipped to $74.73 million on Tuesday from $88.31 million on Monday, as per FSDH Research's report.

In the money market, the Nigerian treasury bills (NT-Bills) secondary market held steady, with average yields across short-term and long-term maturities at 7.04 percent and 12.96 percent respectively. However, NTB bills due January 25, 2024 and April 11, 2024 experienced mild buying interest leading to a yield decline of 1 basis point each.

The Overnight (O/N) rate rose by 0.52 percent to close at 16.46 percent, while the Open Repo (OPR) rate increased by 0.28 percent to finish at 15.58 percent. The Open Market Operation (OMO) bills market closed positively with a yield decrease of 1 basis point to close at 12.01 percent, including for the OMO bill due August 6, 2024.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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