SAT 04 SEPT, 2021-theGBJournal- Nigeria’s FX reserve sustained its weekly accretion closing higher by USD438.35 million w/w to settle at USD34.10 billion (1st September 2021).
Meanwhile, the naira appreciated by 0.1% w/w to NGN411.50/USD at the I&E window (IEW) but depreciated by 1.1% w/w to NGN530.00/USD in the parallel market.
At the IEW, total turnover (as of 2nd September 2021) increased by 19.0% WTD to USD926.51 million, with trades consummated within the NGN400.00 – 449.99/USD band. In the Forwards market, the rate depreciated at the 1-month (-0.4% to NGN413.25/USD), 3-month (-0.8% to NGN417.68/USD), 6-month (-1.2% to NGN423.91/USD), and at the 1-year (-1.8% to NGN436.29/USD) contracts.
We expect improved liquidity in the IEW over the medium term, given our expectation of increased oil inflows in line with the rise in crude oil prices and inflows from FCY borrowings (USD6.18 billion) and IMF SDR (USD3.40 billion).
Accordingly, we expect the naira to remain relatively range-bound (NGN410.00/USD – NGN415.00/USD) at the IEW.
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