SAT, JUNE 24 2023-theGBJournal |The naira depreciated further by 13.9% to end Friday’s trading at N770.17/USD at the I&E window (IEW). Midweek, the local currency sold for as high as N815/$, the highest rate traded.
However, in the weeks ahead, we expect the re-introduction of the “willing buyer, willing seller” model at the IEW to influence the exchange rate direction.
Nonetheless, while the CBN’s abolishment of its multiple FX windows is positive in boosting foreign investors’ confidence, we think they will adopt a wait-and-see approach, for now, looking for signals on the CBN’s plans to start clearing the FX backlogs and boosting FX supply to support the market in the near term.
At the IEW, total turnover (as of 22 June 2023) declined by 31.0% WTD to US$513.88 million, with trades consummated within the N446.32 – N815.00/USD band.
In the Forwards market, the naira depreciated across the 1-month (-8.7% to N764.42/USD), 3-month (-5.2% to N784.68/USD), 6-month (-5.6% to N815.20/USD), and 1-year (-10.0% to N878.74/USD) contracts.
Meanwhile, Nigeria’s FX reserves remained depressed this week, falling by US$239.74 million w/w to US$34.35 billion (22 June).
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