News summary:

• The naira experienced a 0.8% drop in value due to increased dollar demand on the parallel market, particularly from importers.
• The Central Bank of Nigeria’s RT200 scheme has seen a 40% increase in dollars sent home, with $5.6 billion recorded at the end of 2022.
• Nigeria’s foreign reserves have dipped to $35.23 billion, impacting the CBN’s ability to protect the naira.

The value of the Naira dropped sharply on the foreign exchange Market on Wednesday. This was because traders bought more dollars on the parallel market, also known as the black market.

After trade on Wednesday, the naira lost 0.80% of its value, going from N738 per dollar last week to N744 per dollar.

A black market operator said that most of the demand for the dollar came from importers, especially oil and gas traders who couldn’t get foreign currency from the official market.

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said on Tuesday that the amount of dollars sent home through the RT200 scheme has grown by 40% in the past year.

According to the figures we have, the amount of money sent home because of the programme went from $3 billion in 2021 to $5.6 billion at the end of 2022, an increase of 40%.

“Since it began in February 2022, the RT200 project has made good progress in making money from exports. Emefiele said, “The momentum for 2023 is showing both strong numbers and good prospects.”

He said that $1.7 billion was sent back to the economy in the first quarter of 2023, and about $790 million was sold at the Investors and Exporters (I&E) forex window so far this year. The rest of the money stayed in the shippers’ accounts at their home country.

As of May 9, 2023, Nigeria’s foreign reserves, which give the CBN the power to protect the naira, had dropped to $35.23 billion.

“Do you know how many people ask for a dollar for school fees, travel allowance (BTA), and personal travel allowance (PTA)? “But NNPC hasn’t brought in any dollars since February of last year,” said a top CBN officer.

The value of the Naira fell by 0.17 percent, as the dollar was priced at N463.02 on Wednesday, compared to N462.25 at the end of the previous trading day.

Most of the currency sellers who took part in Wednesday’s foreign exchange market auction kept their bids between N446 and N466 per dollar.

On the money market, the Overnight (O/N) rate went up by 0.05 percent from Tuesday’s closing rate of 11.33 percent to Wednesday’s closing rate of 11.38 percent. The Open Repo (OPR) rate, on the other hand, stayed the same at 11.00 percent.

According to a report by the FSDH research, the Nigerian secondary market for government bonds ended on a good note on Wednesday. The average yield across the curve went down by 44 basis points, from 7.53 percent the day before to 7.09 percent. The average rate on long-term bonds went down by 65 basis points. The average returns on short-term and medium-term bonds, on the other hand, stayed the same at 5.53 percent and 6.33 percent, respectively. The most people wanted to buy the Nigerian Treasury bill with a maturity date of November 9, 2023 (NTB 9-Nov-23 (-169 bps)).

The CBN sold NT-bills with terms of 91 days (N4.52 billion), 182 days (N5.44 billion), and 364 days (N134.02 billion) at the Primary Market Auction on Wednesday.

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