FRI. 04 FEB, 2023-theGBJournal| Nigeria’s FX reserves declined for the third consecutive week, as the gross reserve position fell by US$30.67 million w/w to US$37.01 billion (01 February 2023).
Meanwhile, the naira appreciated by 0.1% to N461.50/USD at the I&E window (IEW), with total turnover at the window (as of 02 February 2023) declining by 7.5% WTD to US$460.25 million, as trades were consummated within the N423.00 – N479.42/US$ band.
In the Forwards market, the 1-month (-0.8% to N483.43/USD) and 3-month (-0.2% to N489.61/USD) contracts recorded depreciation, while the 6-month (+0.1% to N506.18/USD) and 1-year (+9.3% to N487.41/USD) contracts appreciated.
Meanwhile, the overnight (OVN) rate expanded by 6bps, w/w, to 11.1%, as the outflows for the FGN bond auction (NGN662.62 billion) and late CRR debit pressured the system liquidity amid the inflow of redesigned naira notes from CBN (c. N400.00 billion).
The average system liquidity settled at a net long position of N728.11 billion (vs. a net long position of N837.61 billion in the previous week).
Next week, system liquidity will be supported by the inflow of OMO maturities of N40 billion. However, we expect the OVN rate to trend upwards, as we believe the CBN will most likely mop up the excess liquidity from the system.
Twitter-@theGBJournal| Facebook-The Government and Business Journal|email:gbj@govbusinessjournal.ng|govandbusinessj@gmail.com
