SAT 24 JULY, 2021-theGBJournal- Nigeria’s FX reserves recorded its highest weekly accretion in twenty-five weeks, as the gross reserves position increased by USD53.48 million w/w to USD33.17 billion (19th July 2021).
Meanwhile, the naira depreciated by 0.3% to NGN411.50/USD at the I&E window (IEW) but appreciated by 0.4% to NGN504.00/USD in the parallel market. At the IEW, total turnover (as of 22nd July 2021) decreased by 59.3% WTD to USD306.01 million, with trades consummated within the NGN403.22 – 420.95/USD band.
In the Forwards market, the rate appreciated across the 1-month (+0.1% to NGN413.01/USD) and 3-month (+0.1% to NGN416.55/USD), 6-month (+0.2% to NGN423.20/USD) and 1-year (0.2% to NGN436.29/USD) contracts.
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. Accordingly, we expect the naira to remain relatively range-bound (NGN410.00/USD – NGN415.00/USD) at the IEW.
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