SAT 28 AUG, 2021-theGBJournal- Nigeria’s FX reserve declined for the second consecutive week, as it fell by USD15.44 million w/w to USD33.48 billion (25th August 2021). Meanwhile, the naira depreciated by 0.1% to NGN412.00/USD and 0.8% to NGN524.00/USD at the I&E window (IEW) and parallel market, respectively.
At the IEW, total turnover (as of 26th August 2021) decreased by 24.9% WTD to USD404.96 million, with trades consummated within the NGN400.00 – 424.25/USD band. In the Forwards market, the rate appreciated at the 1-month (+0.1% to NGN411.78/USD), 3-month (+0.3% to NGN414.39/USD), 6-month (+0.7% to NGN418.73/USD), and at the 1-year (+1.4% to NGN428.55/USD) contracts.
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 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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