SAT, JUNE 03 2023-theGBJournal | Nigeria’s FX reserve maintained the decline from the previous week, as the gross FX reserve declined further by US$52.97 million w/w to close at US$35.09 billion (30 May).
Meanwhile, the naira was flat at N464.67/USD at the I&E window (IEW), with total turnover at the window (as of 01 June 2023) decreasing by 23.8% WTD to US$535.08 million, as trades were consummated within the N460.00 – N481.61/USD band.
In the Forwards market, the naira depreciated across the 1-month (-2.4% to N482.48/US$) contract, 3-month (-5.0% to N511.30/USD), 6-month (-5.6% to N536.48/USD), and 1-year (-4.8% to N565.79/US$) contracts.
Meanwhile, the overnight (OVN) rate contracted by 138bps to 11.9% on the back of the buoyant system liquidity from the prior week combined with additional inflows this week from OMO maturities (N20 billion) and FGN bond coupon payment (N5.63 billion).
Nonetheless, we highlight that the average system liquidity settled at a lower net long position of N184.17 billion, relative to the net long position of N339.93 billion in the previous week.
In the absence of any significant inflows into the system, we expect system liquidity to be pressured next week, causing the OVN rate to trend upward from current levels.
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