Home Money Weekly FX Watch: Nigeria’s FX reserves down US$182.93 million w/w, naira weakens...

Weekly FX Watch: Nigeria’s FX reserves down US$182.93 million w/w, naira weakens as turnover at IEW drops by 22.3% wtd to US$490.88

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SAT 19 JUNE, 2021-theGBJournal- Nigeria’s Foreign exchange reserves sustained its decline, dipping US$182.93 million w/w to USD33.82 billion as 16th June 2021, the lowest since October 2017. The sustained decline is despite the recent rally in global crude oil price with benchmark crude trading $74 p/b.

Meanwhile, the naira depreciated by 0.1% to NGN411.00/USD at the I&E window (IEW) but appreciated by 0.8% to NGN498.00/USD at the parallel market.

At the IEW, total turnover (as of 17th June 2021) decreased by 22.3% WTD to USD490.88 million, with trades consummated within the NGN400.00 – 412.00/USD band.

In the Forwards market, the rate appreciated across the 1-month (+0.4% to NGN411.73/USD), 3-month (+0.9% to NGN415.68/USD), 6-month (+2.0% to NGN419.95/USD) and 1-year (+4.2% to NGN428.65/USD) contracts.

We expect improved liquidity in the IEW over the medium term, given our expectation of increased oil inflows in line with the rise in crude oil prices, and 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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