Naira appreciates at official window despite drop in forex turnover
The exchange rate between the naira and the US dollar closed at N414.8/$1 at the official Investors and Exporters (I&E) window.
Naira appreciated against the US dollar on Thursday to close at N414.8/$1, representing a 0.07% gain compared to N415.07/$1 recorded in the previous trading sessions. Forex turnover at the official market dropped by 37.4% to $139.67 million from $223.18 million recorded in the previous day.
Similarly, naira appreciated against the US dollar on Thursday, gaining by 0.87% to close at N567/$1 from N572/$1 that was recorded in the previous trading session. This is according to information obtained from BDC operators interviewed by Nairametrics.
Nigeria’s foreign reserve reduced by 0.08% on Wednesday, 1st December to close at $41.15 billion compared to $41.19 billion recorded as of the previous day. The recent decline in the nation’s external reserve is attributed to the intervention by the apex bank in the official forex market.
Trading at the official NAFEX window
The exchange rate at the Investors and Exporters window appreciated by 0.07% to close at N414.8/$1 on Thursday, compared to N415.07/$1 recorded over the past six trading sessions.
- The opening indicative rate closed at N413.94/$1 on Thursday, which represents a 15 kobo depreciation compared to N413.79/$1 recorded in the previous trading session.
- An exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N414.8/$1, while it sold for as low as N404/$1 during intra-day trading.
- Forex turnover at the official window decreased by 37.4% to $139.67 million on Thursday.
- According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window dropped from $223.18 million recorded on Wednesday 1st December 2021 to $139.67 million on Thursday 2nd December 2021.
Cryptocurrency watch
The crypto market has been steady in recent trading sessions, only recording marginal movement either positively or negatively. In the early hours of Friday, the crypto market capitalisation had gained 0.42% to stand at $2.578 trillion, representing a gain of $10.26 billion.
Bitcoin gained 0.47% to trade at $56,825.78, Ethereum gained 1.07% to trade at $4,564.37, while Solana dipped marginally by 0.21% to trade at $233.255.
Read: AOMCs push for reduction in fuel taxes
Earlier in the week, the CEO of Twitter and a bitcoin enthusiast, Jack Dorsey announced that he is stepping down from his position at Twitter. The businessman who has been known as one of the most ardent proponents of bitcoin, who also implemented a bitcoin tipping service on Twitter, will now step down from his role and to be replaced by Parag Agrawal.
According to a recent Nairametrics article, Nigerians paid 36% more to but bitcoin than the average price. The report observed that the flagship crypto asset, bitcoin, traded at a 37% premium on some P2P exchanges and other non-traditional channels (N570 to $1) when compared with the Nigerian official exchange rate (N415). This means that bitcoins were more expensive on these platforms compared to their average price on other crypto exchanges of around $57K.
Crude oil price
Crude oil prices rallied in the early hours of Friday, trading above $70 per barrel despite falling below the threshold in the previous trading session, occasioned by the uncertainties surrounding the effect of the new Omicron covid variant.
Brent crude gained 1.61% as of 7am on Friday to trade at $70.79 per barrel, while West Texas Intermediate gained 1.73% to trade at $67.65 per barrel. In the same vein, Natural gas gained 2.71% to trade at $4.166 while OPEC Basket with gain of 0.87% is currently trading at $71.63 per barrel.
On the other hand, Nigerian crude, Bonny Light dipped by 3.96% to trade at $69.12 per barrel, while Brass River and Qua Iboe both lost 2.61% to trade at $70.16 per barrel.
The market had endured recurrent bearish trades this week, following the discovery of the new covid strain in more countries, leading to series of travel bans across Europe and Africa. Meanwhile, the OPEC+ has decided to continue with their planned supply of additional 400,000 bpd of oil into the market in January.
External reserve
Nigeria’s external reserve dipped by 0.08% on Wednesday, 31st December 2021 to close at $41.15 billion, which represents a decline of $32.07 million compared to $41.19 billion recorded as of the previous day.
The decline in the country’s reserve level can be attributed to the continuous intervention of the apex bank in ensuring the stability of the exchange rate. The exchange rate at the official window as remained stable in the past four trading sessions.
It is worth noting that the nation’s foreign reserve had gained $5.99 billion in the month of October, as a result of the $4 billion raised by the federal government from the issuance of Eurobond in the international debt market.
In the month of November, Nigeria’s external reserve lost $633.47 million in value as against a gain of $5.99 million recorded in the previous month and $2.76 million gain in September 2021. On a year-to-date basis, the reserve gain has reduced to $5.78 billion.
