The Central Bank of Nigeria on Friday, intervened in the FX market — its first intervention in this window this year — injecting USD263 million into the interbank retail Secondary Market Intervention Sales (SMIS), and selling CNY39 million in spot and short-tenured forwards.
Meanwhile, the USD/NGN appreciated by 0.18% to NGN364.30 and 0.28% to 362.00 at the I&E FX window and in the parallel market respectively. Total turnover in the IEW increased by 24.1% to USD219.98 million, with trades consummated within the NGN360.00-366.00/USD band.
Also, overnight lending rate surged by 1,058 bps to 35.25%, from 24.67% in the previous session, following wholesale FX provisioning as well as the CBN’s OMO intervention, wherein NGN25.14 billion – NGN4.47 of the 94DTM, NGN1.13 billion of the 185DTM, and NGN19.54 billion of the 353DTM – worth of bills were sold at respective stop rates of 11.9%, 13.5%, and 15.0%.
Trading in the treasury bills market was bullish, as average yield moderated by 6 bps to 15.25%. Yields contracted at the short (-12 bps) and long (-9 bps) ends of the curve, owing to demand for the 66DTM (-81 bps) and 255DTM (-47 bps) bills, respectively. Conversely, yields expanded at the mid (+9 bps) segment, following a selloff of the 94DTM (+92 bps) bill.
Activities in the bond market were bearish, as average yield rose by 7 bps to 15.32%. Sell pressure was concentrated at the short (+19 bps) and mid (+5 bps) segments, with yield on the JUN-2019 (+39 bps) and JAN-2026 (+10 bps) bonds expanding respectively. Conversely, demand for the APR-2037 (-4 bps) bonds led to yield contraction at the long (-4 bps) end of the curve.