SAT 16 OCT, 2021-theGBJournal- Nigeria’s FX reserves sustained its weekly accretion, as the gross reserve position closed higher by USD1.03 billion w/w to USD39.42 billion (13th October 2021).
Meanwhile, the naira depreciated by 0.2% w/w to NGN415.07/USD at the I&E window (IEW) but appreciated by 0.2% w/w to NGN572.00/USD at the parallel market.
At the IEW, total turnover (as of 14th October 2021) declined by 19.8% WTD to USD786.40 million, with trades consummated within the NGN404.00 – 447.60/USD band.
In the Forwards market, the rates on the 1-month (-0.1% to NGN416.07/USD), 3-month (-0.3% to NGN421.01/USD), 6-month (-0.5% to NGN431.47/USD), and 1-year (-1.1% to NGN450.61/USD) contracts reflected the depreciation 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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