Foreign reserves increase by $59.99m

The Nigeria’s foreign exchange (FX) reserves increased by $59.99 million in its week on week (w/w) performance to $39.80 billion as at April 20, 2022.

However, the local currency depreciated at the Investors & Exporters (I&E) window by 0.2per cent to N418.33 against the dollar but appreciated by 0.2per cent to N589 against the dollar at the parallel market.

At the I & E FX market, total turnover traded as of April 21, 2022 declined by 4.3 per cent in its week-till-date (WtD) performance to $556.21 million, with trades consummated within the N410.00 – N453.15/USD band.

Analysts at Cordros capital said: “In our opinion, the CBN has enough supply to support the FX market over the short term, given inflows from the recently issued Eurobond and the IMF’s SDR.

“”However, foreign inflows are paramount for sustained FX liquidity over the medium term, in line with our expectation that accretion to the reserves will be weak given that crude oil production levels remain quite low.

“Thus, FPIs which have historically supported supply levels in the IEW (53.8per cent of FX inflows to the I &e FX in 2019FY) will be needed to sustain FX liquidity levels.

“Hence, we think (1) further adjustments in the Naira against the dollar  peg closer to its fair value and (2) flexibility in the exchange rate would significantly attract foreign inflows back to the market.”