SAT 25 SEPT, 2021-theGBJournal- Nigeria’s FX reserves sustained its weekly accretion as it closed higher by USD498.47 million w/w to USD35.95 billion (22nd September 2021), surpassing the year start mark of USD35.37 billion.
Meanwhile, the naira depreciated by 0.5% w/w and 0.3% w/w to NGN414.90/USD and NGN571.50/USD at the I&E window (IEW) and parallel market, respectively.
At the IEW, total turnover (as of 23rd September 2021) decreased by 34.0% WTD to USD693.94 million, with trades consummated within the NGN404.00 – 448.53/USD band.
In the Forwards market, the rate was flat at the 1-month (NGN416.07/USD) contract, while the 3-month (-0.3% to NGN422.22/USD), 6-month (-0.4% to NGN431.67/USD) and 1-year (-1.2% to NGN450.61/USD) contracts continue to reflect the depreciation of the naira to the greenback.
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 (USD3.50 billion). Accordingly, we expect the naira to remain relatively range-bound (NGN410.00/USD – NGN415.00/USD) at the IEW.
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