Macroeconomic Report & Economic Updates

August 5, 2016

Nigeria Economic Update (Issue 33)

The naira depreciated by 4.3 percent to a
record low of N313/$ at the interbank market segment on July 29, 2016.Precisely, the lack of liquidity in all FX market segments continues to weaken
the naira. In order to increase FOREX liquidity, moderate inflationary
pressures, encourage capital inflows and support the naira, the CBN may need to
increase the supply of FOREX in the interbank market while simultaneously
mopping up idle funds through the sale of securities.

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Nigeria Economic Update (Issue 12)

The naira/dollar exchange rate remained largely stable at the parallel market at ?320/$ during the period7, albeit slight fluctuations on February 29, 2016 (?325/$) and March 2, 2016 (?328/$). The decline in the hoarding of foreign currency as well as the substantial reduction in the speculative demand for dollars were the two key factors responsible for the ease of fluctuations in the forex market8. With the slight increase in the price of crude oil, Nigerias foreign reserve slightly grew by $56 million, from 27.81 billion to $27.84 billion9. With the continued increase in the price of crude oil, a modest build-up of foreign reserve to guard against unfavourable commodity price movements is expected in the near term.