CBN foreign reserves dip by $111.56 million in one week

CBN foreign reserves dip by $111.56 million in one week

Nigeria’s FX reserves sustained its decline for the fourth consecutive week, as it dipped by $111.56 million week-on-week to rest at $34.61 billion as at Friday, May 14, 2021.

Also on the said date, the naira depreciated by 0.3 per cent to N411.67/USD and by 0.2 per cent to N484.00 against the dollar at the I&E window (IEW) and parallel market, respectively.

At the IEW, total daily turnover as of May 14 stood at $203.42 million to post 55.37 per cent increase with trades consummated within the N395.00 – 420.23/USD band.

In the Forwards market, the rate weakened across the 1-month (-0.1% to N413.06/USD), 3-month (-0.1% to N418.97/USD), 6-month (-0.1% to N427.67/USD) and 1-year (-0.1% to N445.50/USD) contracts.

With expected higher oil prices and increase in crude oil production volume, improved liquidity in the IEW is expected over the medium term.

Accordingly, the naira is expected to remain relatively range-bound (N410.00/USD – N415.00/USD) at the IEW.

Meanwhile, the Central Bank of Nigeria (CBN) is believed to have commenced the process to devalue the naira by 5.3 per cent to N400.00 to one dollar at the interbank market to narrow the gap with the IEW rate.