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FX Watch| Naira gains 1.28% as it continues rebound against the green back, Nigeria’s Fx reserves depletes by $14.11 million w/w

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SAT, 19 NOV, 2022-theGBJournal| Nigeria’s FX reserve recorded another decline this week for the eleventh consecutive week, dipping by USD14.11 million w/w to USD37.19 billion (16 November).

Across the FX windows, the naira closed flat at N445.67/USD at the I&E window (IEW). At the I&E window, total turnover (as of 15 November 2022) decreased by 50.3% WTD to US$356.13 million, with trades consummated within the N432.00/US$ to N468.44/USD band.

At the parallel market, the Naira sustained its bounce as buy pressure eases substantially. The local currency closed Friday at N780/$ as against N790/$ the previous day.

In the Forwards market, the rate appreciated at the 1-month (+0.4% to NGN449.28/USD) and 3-month (+0.8% to N457.27/USD) contracts, but the rate depreciated at the 1-year (-0.2% to N504.37/USD) contract. Conversely, the rate was flat at the 6-month (N477.02/USD).

Meanwhile, the overnight (OVN) rate returned to the double-digit territory, as it expanded by 367bps w/w to 16.5%. The financial system was under pressure this week, as the outflows for FGN bond (NGN269.22 billion) and FX auctions outweighed the sole inflow from OMO maturities (NGN10.00 billion).

As a result, the average system liquidity settled lower this week, closing at a net short position of N16.01 billion (vs a net long position of N378.28 billion in the previous week).

Twitter-@theGBJournal| Facebook-The Government and Business Journal|email: gbj@govbusinessjournal.ng|govandbusinessj@gmail.com

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