SAT 18 SEPT, 2021-theGBJournal- Nigeria’s FX reserves sustained its weekly accretion as it closed higher by USD507.08 million w/w to USD35.37billion (16th September 2021) – its highest level in six months. Meanwhile, the naira depreciated by 0.2% w/w and 4.4% w/w to NGN412.88/USD and NGN570.00/USD at the I&E window (IEW) and parallel market, respectively.
At the IEW, total turnover (as of 16th September 2021) increased by 20.1% WTD to USD847.54 million, with trades consummated within the NGN400.00 – 439.54/USD band. In the Forwards market, the rates on the 1-month (-0.8% to NGN416.25/USD), 3-month (-0.9% to NGN420.90/USD), 6-month (-1.6% to NGN429.67/USD), and at the 1-year (-2.5% to NGN445.4/USD) contracts reflected depreciations relative to the USD.
We expect improved liquidity in the IEW over the medium term, given our expectation of increased oil inflows in line with the rise in crude oil prices and (2) inflows from FCY borrowings (USD6.18 billion) and IMF SDR (USD3.40 billion). Accordingly, we expect the naira to remain relatively range-bound (NGN410.00/USD – NGN415.00/USD) at the IEW.
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