SAT 10 APRIL, 2021-theGBJournal- Nigeria’s FX reserves grew by USD131.61 million w/w to USD34.98 billion (7th April 2021) as inflows outstripped outflows.
The naira appreciated by 0.1% to NGN409.00/USD at the I&E window (IEW) but remained flat at NGN485.00/USD in the parallel market. At the IEW, total turnover (as of 8th April 2021) decreased by 2.2% WTD to USD146.34 million, with trades consummated within the NGN394.00 – 405.00/USD band.
In the Forwards market, the rate appreciated across the 1-month (+0.2% to NGN411.88/USD), 3-month (+0.9% to NGN415.27/USD), 6-month (+1.6% to NGN420.53/USD) and 1-year (+2.7% to NGN433.85/USD) contracts.
We expect improved liquidity in the IEW over the medium term, given the higher oil prices and an expected increase in crude oil production volume. Accordingly, we expect the naira to remain relatively range-bound (NGN410.00/USD – NGN415.00/USD) at the IEW.
Similarly, we believe the CBN will devalue the naira by 5.3% to NGN400.00/USD at the interbank market to narrow the gap with the IEW rate.