SAT 09 OCT, 2021-theGBJournal- Nigeria’s FX reserves sustained its weekly accretion, as the gross reserve position closed higher by USD1.20 billion w/w to USD37.99 billion (6th October 2021).
Meanwhile, the naira depreciated by 0.2% w/w to NGN414.30/USD at the I&E window (IEW) but appreciated by 0.3% w/w to NGN573.00/USD at the parallel market. At the IEW, total turnover (as of 7th October 2021) decreased by 39.8% WTD to USD512.81 million, with trades consummated within the NGN404.00 – 448.30/USD band.
In the Forwards market, the rate was flat at the 1-month (NGN415.60/USD) contract, while the 3-month (-0.2% to NGN421.01/USD), 6-month (-0.3% to NGN429.44/USD), and 1-year (-0.4% to NGN445.68/USD) contracts reflected depreciations of the naira to the greenback.
We expect improved liquidity in the IEW over the medium term, given our expectation of increased oil receipts in line with the rise in crude oil prices and 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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