SAT, 24 SEPT, 2022-theGBJournal| Nigeria’s FX reserves decreased for the third consecutive week, falling by USD162.89 million w/w to USD38.49 billion (22 September).
Across the FX windows, the naira was flat at N436.33/USD at the I&E window but depreciated by 0.4% to NGN712.00/USD at the parallel market.
At the IEW, total turnover (as of 22 September) increased by 1.9% WTD to USD421.81 million, with trades consummated within the NGN425.00 – NGN453.03/USD band.
In the Forwards market, the naira weakened at the 1-month (-0.8% to N439.24/USD), 3-months (-0.9% to N444.21/USD), 6-months (-1.1% to N457.57/USD) and 1-year (-1.7% to N484.03/USD) contracts.
Meanwhile, the overnight (OVN) rate oscillated in the double-digit region through the week, eventually rising by 483bps w/w to close at 15.0% on lower system liquidity.
Notably, the average liquidity level for the week settled lower at a net short position of N26.87 billion (vs N212.55 billion in the previous week) as debits for the FGN bond (N261.50 billion) and FX auctions offset inflow from FGN bond coupon payments (N157.84 billion).
We expect the OVN rate to maintain its upward trend next week as we believe the outflow from CBN’s auctions (OMO, NTB & FX) and possible CRR debits may outweigh the expected inflow from FGN bond coupon payments (N131.20 billion).
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