Weekly Economic And Financial Commentary – August 31, 2020

As at Thursday (Aug. 27, 2020), the gross external reserves increased by $65 million to $35.66 billion when compared to $35.60 billion as of Aug. 20. The naira depreciated at the BDC segment by 0.11% to N473.5/$, appreciated at the IEW by 0.09% to N385.7/$ and closed flat at the parallel market at N474.5/$. The 6-months and 12-months forward points traded lower by N1.94 and N3.68 to N391.00/$ and N402.55/$ respectively. Activity improved at the OTC futures market last week, with the sum of transaction of $926.0 million compared to $75.1 million in the prior week. Last week, the CBN announced it would resume FX sale to the BDC segment on September 7th, 2020, almost 6 months after suspended sales due to restriction of international travel. The CBN pegged sales to BDC operators at N384/$, with eventual sales to end users at N386/$. Also, the apex bank directed International Money Transfer Operators to sell FX to Banks and the CBN at N382/$ and N383/$ respectively. However, the volume of sale to BDCs is reduced to $10,000 per BDC with auctions to hold twice a week compared to about $60,000 prior to the suspension.