Naira Recoups Monday’s Losses As Confidence Returns

After stalling its rally and losing value on Monday following threats by the United States President to send troops to Nigeria over alleged religious persecution, the naira regained some of its value on Tuesday as confidence in the Nigerian economy remained strong.

According to data on the Central Bank of Nigeria (CBN) website, the naira depreciated to N1,436.34 to the dollar on Monday from N1,421.73 last week. At the official end of the forward exchange market on Tuesday, the naira rose slightly to N1,433.65 to the dollar.

The story was similar at the parallel market. The naira, which had slipped to N1,460 to the dollar on the streets on Monday, closed stronger on Tuesday, selling between N1,450 and N1,451 to the dollar.

Currency dealers attributed the stability to moderate demand and improved supply from informal sources, which helped cushion potential pressure arising from Trump’s comments. In a post on Truth Social on Saturday, Trump claimed he instructed the Pentagon “to prepare for possible action” and threatened an immediate cut-off of aid to Nigeria, an OPEC member and Africa’s most populous country.

Meanwhile, the Nigerian Treasury Bill (NTB) secondary market traded on a bullish note, with the average yield contracting by three basis points to 17.4 per cent. Across the curve, the average yield expanded at the short (+9bps) end, due to the sell-off of the 79DTM (+71bps) bill, while it contracted at the mid (-1bp) and long (-13bps) segments, driven by the demand for the 156DTM (-1bp) and 303DTM (-23bps) bills, respectively. Conversely, the average yield expanded by 21bps to 22.2 per cent in the OMO segment.

Elsewhere, the FGN bond secondary market traded on a bullish note, as the average yield contracted by 2bps to 15.8 per cent. Across the curve, the average yield expanded at the short (+3bps) end, due to profit-taking in the APR-2029 (+12bps) bond, while it contracted at the mid (-11bps) segment, following the demand for the JUL-2034 (+45bps) bond. It closed flat at the long