Home Money FX Watch: Foreign reserves at US$33.10 billion after a slight drop, Naira...

FX Watch: Foreign reserves at US$33.10 billion after a slight drop, Naira trades at N506.US$

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SAT 17 JULY, 2021-theGBJournal- Nigeria’s FX reserves declined marginally by USD17.05 million w/w to USD33.10 billion (as of 14th July 2021).

Meanwhile, the naira appreciated by 0.3% to NGN410.38/USD at the I&E window (IEW) but depreciated by 0.2% to NGN506.00/USD in the parallel market.

At the IEW, total turnover (as of 15th July 2021) decreased by 83.4% WTD to USD90.13 million, with trades consummated within the NGN411.80 – 423.90/USD band. In the Forwards market, the rate appreciated on the 1-month (+0.1 to NGN413.32/USD) and 3-month (+0.1% to NGN417.10/USD) contracts but depreciated on the 6-month (-0.1% to NGN424.04/USD) and 1-year (-0.3% to NGN437.00/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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