SAT, 30 APRIL, 2022-theGBJournal | Nigeria’s FX reserves recorded its first depletion in five weeks as it decreased by USD160.32 million w/w to USD39.65 billion (27 April 2022).
Elsewhere, the naira depreciated by 0.2% both at the I&E window (IEW) and parallel market to NGN419.00/USD and NGN590.00/USD, respectively.
At the IEW, total turnover (as of 28 April 2022) increased by 44.3% WTD to USD866.38 million, with trades consummated within the NGN410.00 – NGN453.15/USD band.
In the Forwards market, the naira depreciated at the 1-month (-0.1% to NGN418.31/USD), 3-months (-0.1% to NGN423.77/USD), 6-months (-0.2% to NGN432.48/USD) and 1-year (-0.3% to NGN448.53/USD) contracts.
Thus, FPIs which have historically supported supply levels in the IEW (53.8% of FX inflows to the IEW in 2019FY) will be needed to sustain FX liquidity levels. Hence, we think further adjustments in the NGN/USD peg closer to its fair value and flexibility in the exchange rate would be significant in attracting foreign inflows back to the market.
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