Dipo Olowookere
By Dipo Olowookere
The total of volume trade recorded last week in the I&E forex window surged by 39.6 percent when compared with the previous week.
According to analysts at Cordros Research, the total volume traded in the I&E FX segment for the week stood at $900.50 million in contrast to $645.1 million the week earlier.
Cordros Research said the Naira was flat against the Dollar in the parallel market at N363 while it appreciated by 0.07 percent to N360.41k in the I&E FX window.
During the week, the Central Bank of Nigeria (CBN) injected $210 million into the forex market, comprising $100 million, $55 million, and $55 million disbursements to the wholesale, SME, and invisibles windows, respectively.
Given the continued accretion to the foreign reserves and the CBN’s continued intervention, our theme on the Naira remains stability.
Commenting on the country’s economy, Cordros Research said in its continued bid to improve the ease of doing business in the country, the Federal government has reduced documentation requirements for exports and imports to 7 and 8, from 10 and 14 respectively, and saddled the Nigeria Customs Service (NCS) with additional responsibilities – including Saturdays for official work, shipping manifests to other examination agencies as soon as they are received and coordinating mandatory joint examination.
With plans toward ensuring 24-hour clearance of cargo, using cutting-edge technology amid continuous removal of bottlenecks, we think this will further improve Nigeria’s ease of doing business ranking and more importantly, facilitate trade.
Earlier, Fitch Ratings cut its 2017 economic growth forecast for Nigeria to 1%, from 1.5%, on the back of fragile recovery (as oil revenue remain depressed), and also added that oil production target of 2.3mbpd was ambiguous, cutting its forecast to 2mbpd levels (which was partly linked to a potential resurgence violence in the Niger Delta region as election approaches in 2019).
While acknowledging the continued vulnerability of the domestic economy to oil-related shocks, we think government efforts (albeit unfolding too slowly) at implementing reforms (the ERGP in particular) provide short to medium term comfort vis-à-vis a firmer recovery.
