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FX WATCH: Nigeria’s FX reserves sustain decline, drops by US$185.39 million w/w to US$34.91 billion, Naira trades N410/$ flat at I&E window

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SAT 01 MAY, 2021-theGBJournal- Nigeria’s foreign exchange reserves sustained its decline as outflows from the reserves outstripped inflows. Thus, it dipped by USD185.39 million w/w to USD34.91 billion (30th April 2021).

Elsewhere, the naira was flat at NGN410.00/USD and NGN485.00/USD at the I&E window (IEW) and the parallel market, respectively.

At the IEW, total turnover (as of 29th April 2021) decreased by 31.3% WTD to USD239.87 million, with trades consummated within the NGN392.00 – 435.65/USD band.

In the Forwards market, the rate appreciated across the 1-month (+0.2% to NGN412.85/USD), 3-month (+0.2% to NGN418.79/USD), 6-month (+0.2% to NGN427.83/USD) and 1-year (+0.3% to NGN446.20/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.-With Cordros Research.

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