Naira falls further at official market as foreign reserve gains $786 million in a day
The exchange rate between the naira and the US dollar closed at N414.3/$1, at the Investors and Exporters window, where forex is traded officially.
Naira depreciated further against the US dollar on Tuesday, to close at N414.3/$1, representing a 0.18% fall compared to N413.55/$1 recorded on Monday 4th October 2021.
Meanwhile, the exchange rate at the parallel market gained 0.35% to close at N575/$1 on Tuesday from N577/$1 recorded in the previous week. This is according to information obtained by Nairametrics from BDC operators in Lagos.
The crude oil market extended its gains as Brent crude price closed at $82.56 per barrel on Tuesday amid OPEC+ decision to maintain production quota.
In the same vein, Nigeria’s foreign reserve gained a record high of $785.84 million on Monday, 4th October 2021 to close at $37.57 billion, hitting its highest level in 20 months. This is according to data from the Central Bank of Nigeria.
Trading at the official NAFEX window
The exchange rate fell against the US dollar on Tuesday, 5th October 2021 to close the day at N414.3 to a dollar, representing a 0.18% depreciation compared to N413.55/$1 recorded on Monday, 4th October 2021.
The opening indicative rate closed at N414.03/$1 on Tuesday, representing a 32 kobo depreciation compared to N413.71/$1 recorded in the previous trading day.
An exchange rate of N415.2 to a dollar was the highest rate recorded during intra-day trading before it settled at N414.3/$1, while it sold for as low as N404/$1 during intra-day trading, the same as the previous trading day.
Meanwhile, forex turnover at the official window grew by 12.2% on Tuesday, 5th October 2021.
According to data tracked by Nairametrics from the FMDQ, forex turnover increased from $108.83 million recorded on Monday to $122.15 million on Tuesday 5th October 2021.
Cryptocurrency watch
The world’s most popular and capitalised crypto asset, surpassed the $50,000 threshold on Tuesday, as it currently trades at $51,568.63 as of 6:02am on Wednesday, indicating increased positive investor sentiments towards the highly demanded crypto asset.
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The new price point indicates a near recovery of all the losses encountered in September where Bitcoin fell from a high of $52,850, to trade as low as $39,787, representing a 24.72% decline.
Meanwhile, as of the time of writing this article the crypto market has dipped marginally by 0.58% to stand at $2.22 trillion, representing $13.31 billion loss to trading investors, while Ethereum performance currently stands at –0.65% to $3,493.33.
Meanwhile, Nigerian traded about $32.16 million in Bitcoin in the month of September, indicating a drop compared to $44 million recorded in the previous month. The total trading volumes between January and September 2021 stood at $315.76 million.
Crude oil price
Crude oil extended its gains on Tuesday, consolidating on bullish trends recorded in recent time as Brent Crude gained 1.6% to close at $82.56 per barrel, compared to $81.31 per barrel recorded in the previous day.
Similarly, West Texas Intermediate also gained 0.22% to close at $79.1 per barrel, while Natural Gas closed at $6.314 per barrel on Tuesday.
Nigeria’s crude, Bonny Light traded bullish on Tuesday as its price increased by 3.94% to close at $40.73 per barrel on Tuesday, while other Nigerian crude, Brass River and Qua Iboe both recorded 3.32% gains apiece to close at $81.13 per barrel.
The bullish run continued, following the OPEC+ decision to maintain its production increases of 400,000 bpd per month. In the meeting, all participating states agreed that sticking to the initially designed course would be in the collective interest of the group.
External reserve
Nigeria’s foreign reserve gained further by $785.8 million on Monday, 4th October 2021 to close at $37.6 billion compared to $36.78 billion recorded as of the previous day. The latest increase represents a 2.1% boost in the country’s foreign reserve and the highest daily increase since February 2020.
The reserve gained a record $2.76 billion in the month of September 2021, while the recent gain puts the year-to-date gain at $2.19 billion.
The recent increase in the reserve position, which has continued since the 25th of August is in line with recent reports suggesting that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021.
Although the reserves did not hit $40 billion as predicted in the previous month, it continues to record positive growth and could cross the predicted line by the end of the current month, if it maintains this trajectory.
With the oversubscription of the $4 billion Eurobond sourced by the federal government from the international debt market, the reserve is likely to get more firepower in the coming weeks.
