Recently, OPEC and its allies reiterated the need to ensure that proactive and preemptive measures are taken to support the oil market. Consequently, Brent rebounded to $43.21/bbl. from last week’s close of $40.65/bbl. despite rising COVID-19 cases. Locally, the external reserves remained pressured as it decreased 5bps w/w to $35.7bn (10/07/2020).
At the official window, the CBN spot rate remained unchanged at ₦379.00/US$1.00 while the parallel market rate strengthened by ₦8.00 w/w to ₦457.00/US$1.00. The NAFEX rate depreciated 83kobo w/w at the Investors & Exporters (I&E) Window to close at ₦385.83/US$1.00. Furthermore, weekly turnover at the I & E window slipped 36.4% w/w to $329.2m from the $517.5m recorded in the previous week.
The aggregate value of the open contracts at the FMDQ Securities Exchange FX Futures Contract segment improved by 0.6% ($66.4m) w/w and settled at $11.2bn. The DEC 2020 instrument (contract price: ₦394.55) recorded the strongest demand with an additional subscription worth $20.4m, putting the total value at $2.1bn. Meanwhile, the MAY 2021 (contract price: ₦408.74) and AUG 2021 (contract price: ₦417.25) instruments recorded $1.00m additional subscription apiece, bringing their respective values to $692.84m and $239.63m. In the coming week, we expect the naira to remain relatively stable across the board.