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Monday, March 27, 2023

Nigerian Naira Set to Test Key N500 per Dollar Resistance Level

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The Nigerian Naira is set to test a key resistance level at the N500 per dollar (USD) mark that if breached could lead to a further downdraft in the beleaguered currency of Africa’s largest economy.

The Naira lost 0.61 percent at the parallel market yesterday vs the USD closing at N498, while it remained flat against the British Pound GBP printing at N700.

Analysts expect the FX market to be dictated by heightened dollar demand and CBN FX policies, going forward.

At the Investors and Exporters FX window, while the Naira gained by 0.54 percent and 0.12 percent vs the GBP and Euro (EUR) closing at N581.85 and N502.69 respectively, it remained flat against the USD printing at N412.00.

In the fixed income space. money market rates dropped as the Open Buy Back and Overnight rates fell by 50 basis points (bps) and 33 bps to close at 12.00 percent and 12.67 percent respectively.

The bond market traded on a quiet note with yields only declining slightly across few maturities, with the yield on the 7yr benchmark bond shedding 6 bps to close at 12.98 percent, while the yields on the 5yr and 10yr benchmark bonds closed flat at 12.55 percent and 13.21 percent respectively.

“In the near term, we expect market activity to be influenced by liquidity levels and foreign investor participation,” said analysts at Investment One Research.

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