SAT, 26 SEPT, 2020-theGBJournal-Nigeria’s FX reserves recorded its first weekly decline in five weeks, falling by USD47.33 million w/w to USD35.77 billion. Across the FX windows, the naira remained flat against the US dollar at NGN386.00/USD at the Investors’ and Exporters’ (I&E) window but weakened by 0.4% to NGN465.00/USD in the parallel market, despite Central Bank Of Nigeria’s (CBN) weekly FX sale to BDCs.
In the Forwards market, the rates appreciated across the 1-month (+0.1% to NGN386.47/USD), 3-month (+0.2% to NGN387.48/USD), 6-month (+0.3% to NGN389.82/USD) and 1-year (+0.2% to NGN399.44/USD) contracts.
Despite the CBN’s stronger commitment towards exchange rate unification, ‘’we still see legroom for the currency to depreciate further in the medium-to-long term, at least towards its REER derived fair value,’’ says analysts at Cordros Research.
Their forecast is hinged on the ‘’widening current account position, currency mispricing, which could induce speculative attacks on the naira, and the resumption of FX sales to the BDC segment of the market which should place an additional layer of pressure on the reserves.’’
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