SAT, 15 OCT, 2022-theGBJournal| Nigeria’s FX reserve sustained its descent for the sixth consecutive week, falling to its lowest level since 5 October 2021.
Precisely, the reserves declined by USD165.65 million w/w to USD37.91 billion (13 October 2022). Across the FX windows, the naira depreciated both at the I&E window (IEW) and parallel market by 0.5% and 1.1% to N441.38/USD and N743.00/USD, respectively.
At the I&E window, total turnover (as of 13 October 2022) declined by 21.5% WTD to USD333.55 million, with trades consummated within the N414.00 – N464.55/USD band.
In the Forwards market, the rate depreciated on the 1-month (-0.5% to N419.70/USD), 3-month (-0.7% to N455.41/USD), 6-month (-1.3% to N473.04/USD), and 1-year (-1.3% to N498.04/USD) contracts.
Meanwhile, the overnight (OVN) rate dipped this week by 75bps w/w to close at 16.5%, as inflows from NTB maturities (N190.89 billion) and OMO maturities (N10.00 billion) saturated system liquidity and overshadowed debits for CBN’s NTB and FX auctions.
Nonetheless, we highlight that the average liquidity level for the week settled lower at a long position of NGN54.08 billion (vs a long position of N182.54 billion in the previous week).
We expect the OVN to trend upwards in the coming week, as funding pressures from the week’s auctions (FGN bond, OMO & FX) will likely offset the expected inflow from FGN bond coupon payments (NGN46.44 billion).
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