SAT 11 SEPT, 2021-theGBJournal- The accretion to Nigeria’s FX reserves was sustained for the second consecutive week, as it closed higher by USD441.63 million w/w to USD34.70 billion (8th September 2021).
Meanwhile, the naira depreciated by 0.1% and 2.8% w/w to NGN412.00/USD and NGN545.00/USD at the I&E window (IEW) and parallel market, respectively.
At the IEW, total turnover (as of 9th September 2021) declined by 39.7% WTD to USD635.71 million, with trades consummated within the NGN400.00 – 430.00/USD band.
In the Forwards market, the rates on the 1-month (+0.1% to NGN412.75/USD), 3-month (+0.1% to NGN417.31/USD), 6-month (+0.2% to NGN423.01/USD), and 1-year (+0.5% to NGN434.22/USD) contracts reflected appreciations relative to the USD.
We expect improved liquidity in the IEW over the medium term, given our expectation of (1) 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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