SAT, SEPT 30 2023-theGBJournal |The narratives in the Nigerian FX market have remained the same in recent weeks, as FX reform momentum has slowed down.
Hence, barring any significant positive developments, we expect the lingering low crude oil production and a sustained dip in foreign investors’ net flows to weigh on FX supply in the short term. Consequently, we expect FX liquidity constraints to linger in the near term, ensuring the local currency pressures remain intact.
Meanwhile, the country’s FX reserves declined for the nineteenth consecutive week, decreasing by US$34.25 million w/w to US$33.24 billion (28 September) – the lowest level since July 2021.
Likewise, the naira depreciated by 1.0% to N755.27/USD at the I&E window (IEW), with total turnover at the window (as of 28 September) decreasing by 46.4% WTD to US$344.67 million as trades were consummated within the N590.00 – N851.00/USD band.
In the Forwards market, the naira recorded depreciation on the 1-month (-1.2% to N791.13/USD), 3-month (-1.0% to N803.09/USD), 6-month (-0.7% to N820.86/US$) and 1-year (-1.0% to N876.74/US$) contracts.
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