Naira Depreciates slightly despite $210m FX intervention by the CBN - PROSHARE

January 30 2018

***CBN Injects $210m into Forex Market***
***Foreigners Pile Into Nigerian Stocks, New York ETF as Oil Climbs***

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Bonds
The bond market remained scantily traded in today's session, with slight sell on the 26s and 27s bond offset by some buys on the short-end of the curve. Yields consequently closed flat on the average, as market players preferred to stay square on their positions. We expect this trend to persist in the near term on the backdrop of a relatively lacklustre demand for bonds.

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Treasury Bills
The T-bills market was also scantily traded, with continued local and offshore client demand for the OMO auction by the CBN. The CBN sold a total of N84.30bn of the 248-day bill offered at 14.40%. There was however no bids for the shorter tenured bill, as in the previous session. We expect slight buying interests in the market tomorrow, especially on the long end of the curve.

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Money Market
The OBB and OVN rates inched slightly upwards to 5.83% and 6.58%, on the backdrop of the OMO T-bill (N84.30bn) and Wholesale FX sales ($210mn) by the CBN. System liquidity is however estimated to remain buoyant at c.N80bn positive. We expect inflows from retail FX refunds to further moderate cost of funds in tomorrow's session.

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FX Market
The CBN Official spot rate depreciated by 0.02% to N305.70/$, from its previous day rate of N305.75/$. This was despite the CBN's intervention of $210m in the Wholesale, SME and Invisibles segment of the Interbank FX market. The CBN's external reserves is however recorded to have improved by 1.76% to $40.33bn as at 25th January 2018.
Turnover in the Investors and Exporters' FX Window fell by 96.14% to $334million from its YTD high of $655million recorded in the previous session. The Market's spot rate also depreciated marginally by 0.01% to close at N360.37/$ from N360.35/$. There was an intraday high of N361.50/$ and a low of N350.00/$, with the bulk of trades consummated between N355.00/$ and N361.00/$.
Rates in the Unofficial market however appreciated by 0.06% to N363.10/$
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