SAT 23 OCT, 2021-theGBJournal- Nigeria’s FX reserves continues to reflect the inflows from IMF SDR and FCY borrowings as it sustained its weekly accretion and closed higher by USD943.48 million w/w to USD40.76 billion (20th October 2021).
Meanwhile, the naira was flat at NGN415.07/USD at the I&E window (IEW) but appreciated by 0.2% w/w to NGN571.00/USD at the parallel market.
At the IEW, total turnover (as of 21st October 2021) declined by 47.6% WTD to USD610.13 million, with trades consummated within the NGN405.00 – 444.00/USD band.
In the Forwards market, the rate was flat at the 1-month (NGN415.91/USD) contract, while the 3-month (+0.3% to NGN421.10/USD), 6-month (+0.4% to NGN429.82/USD), and 1-year (+1.0% to NGN446.28/USD) contracts reflected the appreciation of the naira to the greenback.
We expect improved liquidity in the IEW over the medium term, given our expectation of increased oil receipts in line with the rise in crude oil prices and inflows from FCY borrowings (USD6.18 billion) and IMF SDR (USD3.50 billion). Accordingly, we expect the naira to remain relatively range-bound (NGN410.00/USD – NGN415.00/USD) at the IEW.
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