Investors FX window records $66.61m transactions turnover
A total of $66.61 million was traded at the Investors & Exporters Foreign Exchange (I & E FX) on Thursday.
Foreign exchange trade at the FMDQ Group witnessed increased growth on the turnover when compared to $16.06million traded on Wednesday.
The Naira at the I & E FX on Thursday gained 0.57per cent and 0.08 per cent against the pound and dollar to close at N481.63 and N385.70 respectively, it closed down against the EUR by 0.15per cent printing at N434.63.
At the parallel market, while the Naira closed flat against the dollar and euro at N453 and N490 respectively, it lost 0.36per cent against the pound to close at N552.
Subsequently, trading at the Central Bank of Nigeria (CBN) interbank market remained flat at N361 against the dollar on Thursday.
Analysts at CSL stockbrokers Limited in a report said the possibility of further devaluation and weak economic outlook has also stalled foreign portfolio inflows, a major source of dollars into the economy.
According to the company, “Reports also say remittances from official sources, which is also a significant source of FX has slowed, given the conversion rate of N374/$ compared with the parallel market rate of about N450/US$.
“Liquidity remains tight in the FX market with the average monthly turnover in the I&E market significantly down to $41.5million in May from $297.5million in January.
“Yields on OMO bills also remain at historic lows. Persisting low yields, weak economic outlook, and expectations of devaluation will continue to deter foreign interest in the Nigerian market in our view.
“We, therefore, anticipate significant sell-offs in the equities and money market as soon as the CBN is able to meet foreign investor demand for dollars.
“That said, we expect the significant sell-offs to push OMO yields higher, which may result in some inflows considering ultra-low yields in advanced economies.”
However, the money market rates declined today as Open buyback and Overnight rates decreased from 8.17per cent and 8.92 per cent to 2.80 per cent and 3.70 per cent respectively. The decline in rates may not be unconnected to OMO maturities, which may have boosted system liquidity.
The bond market was largely positive today as yields declined across most maturities. Consequently, the yields on the 5yr, 7yr and 10yr benchmark bonds dropped by 95basis points, 35 basis points and 44basis points to close at 7.45 per cent, 9.95per cent and 10.24 per cent respectively.
