SAT, 10 SEPT, 2022-theGBJournal| Nigeria’s FX reserves dipped after three consecutive weeks of accretion, falling by US$81.74 million w/w to US$38.92 billion (as of 6 September). Across the FX windows, the naira depreciated by 1.1% to N436.33/US$ and N708.00/USD at the I&E window and parallel market, respectively.
At the IEW, total turnover (as of 8 September) declined by 62.2% WTD to USD282.85 million, with trades consummated within the NGN425.00 – N437.50/USD band.
In the Forwards market, the naira depreciated at the 1-month (-0.3% to N435.83/USD) contract, but appreciated at the 6-months (+0.1% to N452.19/USD) and 1-year (+0.3% to N476.36/USD) contracts. Conversely the naira was flat at the 3-months (NGN440.30/USD) contract.
Meanwhile, this week, the overnight (OVN) rate closed lower by 350bps, w/w, at 9.0%, as the system remained saturated with liquidity from the prior week despite the absence of significant inflows.
We highlight that the average system liquidity level settled lower this week, but remained positive at a net long position of N78.72 billion (vs a net long position of N352.31 billion in the previous week).
We expect the OVN rate to trend northward next week, as the thin inflow from OMO maturities (NGN35.00 billion) may not be sufficient to keep system liquidity afloat.
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