HomeBlogBlogMarket Summary – January 2024

Market Summary – January 2024

Naira Skids as 24hrs Banks FX Offload Disappoint  

The Naira depreciated by 0.43% against the US Dollar in the Nigeria autonomous window, closing at a rate of ₦1461.90 as foreign currency scarcity persists. Local deposit money banks were asked to offload their excess foreign currency asset to meet the new guideline released by the apex bank. There is a signal that deposit money banks 24 hours FX sales requested by the apex bank failed to upturn FX scarcity at the official window. 

Treasury Bills Buying Slows after CBN Repriced Rates 

Trading activities in the secondary market for Nigerian Treasury bills have slowed down for most of the week as yields on naira assets plunged. The increased buying momentum that started early in the New Year has seen average yield nosediving below 3%. 

 Investors and traders are hoping to see fresh catalysts that would drive yield repricing in the fixed income market. Compared with the ongoing boom in the equities space, investors have been getting negative interest rates on fixed interest income securities in the local debt capital market. 

Nigeria Customs Adjusts Exchange Rates on Import Duties 

The Nigeria Customs Service has adjusted the exchange rates for import duties on goods coming to the country.  The adjustment comes as the apex bank devalued the local currency. 

The authority is putting efforts together to drive local economic growth and boost FX inflows. Details from the trade portal showed that the British pound conversion rate has now increased to N1725.995. The rate is expected to be applied to goods coming from the United Kingdom. 

Importers would pay N1355 on each dollar charge as import duty on goods coming from the United States and other countries with US dollar invoices.  Before the latest devaluation of the local currency, the FX spot rate was at N951.842. 

Nigeria US Dollar Bonds Yield Rises to 10.2% 

Selloffs experienced at the international debt capital market on Nigeria’s sovereign Eurobonds market segment provoke a marginal spike in the yield curve. Foreign investors’ heightened risk-off sentiment prevailed across the yield curve, resulting in a 3 basis points increase in the average yield to 10.20%. 

The market reacted to the recent decision of the Nigerian central bank to reduce foreign currency asset holdings of local banks. The new policy comes after the apex bank spotted FX speculative tendencies of banks with net FX positions.

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