SAT, OCT 10 2020-theG&BJournal-Nigeria’s FX reserves declined by USD16.75 million w/w to USD35.73 billion, as FX outflows outpaced inflows.
Across the FX windows, the naira traded flat at NGN385.83/USD against the US dollar at the I&E window, while it strengthened by 1.8% to NGN457.00/USD in the parallel market.
In the Forwards market, the naira strengthened across the 3-month (+0.1% to NGN387.65/USD), 6-month (+0.2% to NGN389.90/USD) and 1-year (+0.6% to NGN397.39/USD) contracts, while the 1-month (NGN386.39/USD) was flat.
Despite the CBN’s stronger commitment towards exchange rate unification, analysts at Cordros Research say they still see legroom for the currency to depreciate further in the medium-to-long term, at least towards its REER derived fair value.
‘’Our prognosis is hinged on the widening current account (CA) position, currency mispricing, which could induce speculative attacks on the naira, and the resumption of FX sales to the BDC segment of the market which should place an additional layer of pressure on the reserves,’’ Cordros said.
|twitter:@theGBJournal|email: info@govandbusinessjournal.com.ng|
