SAT. 25 FEB, 2023-theGBJournal| Nigeria’s FX reserve fell by US$36.76 million w/w to close at USD36.72 billion (21 February 2023).
Meanwhile, the naira was flat at N461.17/USD at the I&E window (IEW), with total turnover at the window (as of 23 February 2023) decreasing by 45.9% week-to-date (WTD) to USD280.78 million, as trades were consummated within the N406.75 – N478.78/USD band.
In the Forwards market, the naira rates appreciated across the 1-month (+0.3% to N485.47/USD), 3-month (+0.5% to N491.72/USD), 6-month (+1.5% to N525.72/USD), and 1-year (+8.2% to N571.95/US$) contracts.
At the money market, the overnight (OVN) rate contracted by 700bps w/w to 10.8% as the inflows for FAAC allocation (c. N457.84 billion), OMO maturities (N70.00 billion), and FGN bond coupon payments (N66.82 billion) saturated the financial system this week.
Overall, we highlight that the average system liquidity closed this week at a net long position of N209.69 billion (vs a net long position of N218.41 billion in the previous week).
We believe the OVN rate will head northwards, as the outflows for next week’s auctions (OMO & FX) and possible CRR debits will pressure the financial system in the absence of any significant inflows into the financial system.
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