SAT, 29 OCT, 2022-theGBJournal| Nigeria’s FX reserves declined for the eighth consecutive week, falling by US$67.22 million w/w to US$37.49 billion (26 October).
The naira depreciated by 0.7% to N444.75/USD at the I&E window.
At the IEW, total turnover (as of 27 October) declined by 14.5% wtd to USD300.82 million, with trades consummated within the N423.00 – N458.15/USD band.
In the Forwards market, the naira depreciated at the 1-month (-0.5% to N449.45/USD), 3-months (-1.0% to N458.75/USD), 6-months (-1.1% to N476.53/USD) and 1-year (-0.8% to N501.04USD) contracts.
Meanwhile, the overnight (OVN) rate was unchanged this week at 16.5%, amid a flurry of inflows from FAAC disbursement (c. N465.99 billion), FGN bond coupon payments (N178.50 billion), net NTB issuances (N131.08 billion) and OMO maturities (N30.00 billion). We note that the average system liquidity for the week closed at a net short position of N15.48 billion vs a net short position of N174.62 billion in the previous week).
Next week, we expect the OVN rate to trend upwards, as the N20.00 billion expected from OMO maturities may not be sufficient to saturate the system and keep the system afloat.
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