SAT, 08 OCT, 2022-theGBJournal| This week, Nigeria’s FX reserves decreased by US$153.59 million w/w to US$38.10 billion (06 October 2022).
Across the FX windows, the naira depreciated by 0.5% to NGN439.17/USD at the I&E window (IEW) but appreciated by 0.7% to N735.00/USD in the parallel market.
At the IEW, total turnover (as of 06 October 2022) decreased by 42.5% wtd to US$325.29 million, with trades consummated within the N425.00 – 460.00/USD/USD band.
In the Forwards market, the rate appreciated across the 1-month (+0.2% to NGN445.94/USD), 3-month (+0.3% to N452.02/USD), 6-month (+0.2% to N467.08/USD) and 1-year (+0.7% to N491.70/USD) contracts.
Meanwhile, at the money market, the overnight (OVN) rate increased by 8bps, w/w, to 17.3%, following the already tight system liquidity.
We highlight that the average system liquidity level settled lower this week but remained positive at a net long position of N113.17 billion (vs a net long position of N182.97 billion in the previous week).
We expect the OVN rate to trend northward next week, as the thin inflow from OMO maturities (N10.00 billion) may not be sufficient to keep system liquidity afloat.
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