Tuesday, 2nd November 2021: The exchange rate between the naira and the US dollar closed at N415.07/$1, at the official Investors and Exporters window. Naira fell against the US dollar to close at N415.07/$1 on Tuesday 2nd November 2021, representing a 0.02% depreciation compared to N414.98/$1 recorded at the close of trading activities on Monday.
On the other hand, the naira remained flat against the US dollar at the parallel market on Tuesday to close at N570/$1, the same as recorded at the close of trading activities on Monday, 1st November 2021. This is according to information obtained by Nairametrics from BDC operators in Lagos.
Nigeria’s foreign reserve retreated for the second time in a row as it declined by $29.35 million to close at $41.79 billion as of Monday, 1st November 2021. This represents a 0.07% drop compared to $41.82 billion as of 29th October 2021.
Trading at the official NAFEX window
The exchange rate depreciated against the US dollar on Tuesday, 2nd November 2021, to close at N415.07/$1 compared to N414.98/$ recorded in the previous trading session. This represents a 0.02% fall in the exchange rate.
The opening indicative rate closed at N415.07/$1 on Tuesday. This is 14 kobo higher when compared to N414.12/$1 recorded in the previous trading day.
An exchange rate of N444 to a dollar was the highest rate recorded during intra-day trading before it settled at N415.07/$1, while it sold for as low as N404/$1 during intra-day trading. The highest rate recorded during the day has been the same in the past six trading sessions.
Forex turnover at the official window depreciated significantly to its lowest level since August 20th. Forex liquidity declined by 61% on Tuesday, 2nd November 2021.
According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window decreased from $160.64 million recorded on Monday to $62.58 million on Tuesday 2nd November 2021.
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The cryptocurrency market also started bearish despite the positive rally recorded on Tuesday. The total crypto market cap currently stands at $2.722 trillion, representing a 0.43% decline compared to the previous day.
In the same vein, Bitcoin dipped marginally by 0.36% to trade above $63 thousand, while Ethereum also dipped 0.69% to trade at $4,563.88. Meanwhile, November has been known for trading bullish since 2013, with the exception of 2018 and 2019. The market has already gained over 3% in November having already recorded a 39.92% surge in the previous month.
The bullish run came amid numerous positive developments in the industry. These include a reassurance from Fed Chair Jerome Powell and SEC Chief, Gary Gensler that the US has no intentions to ban BTC and the subsequent launch of two Bitcoin Futures ETFs in the country.
Crude oil price
The crude oil market started bearish on Wednesday, as Brent Crude dipped 1.02% to trade at $83.86 per barrel as the American Petroleum Institute (API) reported its sixth straight week of crude oil inventory build.
According to the API, the inventory build for crude oil was estimated to be 3.594 million barrels, from the 2.318 million barrels recorded in the previous week. Meanwhile, West Texas Intermediate declined by 1.42% to trade at $82.72 per barrel as of 6:30 am on Wednesday.
Natural gas also dipped by 0.29% to trade at $5.526 per barrel, while OPEC basket remained flat at $82.41 per barrel. Nigeria’s crude, Bonny Light also dipped 0.04% to trade at $84.3 while Brass River and Qua Iboe both gained 2.07% to trade at $84.76 per barrel.
However, the Chief Financial Officer of BP Plc, Murray Auchincloss during a conference call on Tuesday said that demand will continue to increase and reach pre-pandemic levels at some point in 2022. According to him, “OPEC+ is doing a good job managing the balance, so we remain constructive on oil prices.”
Nigeria’s foreign reserve declined for the second time in a row, having recorded continuous positive growth in the past two months. The reserve level dipped marginally by 0.07% to close at $41.79 billion as of 1st November 2021, compared to $41.82 recorded as of the previous day.
Meanwhile, the nation’s foreign reserve gained $5.04 billion in the month of October, on the back of the $4 billion raised by the federal government from the issuance of Eurobond in the international debt market. The gains recorded in the previous month is higher than the $2.76 billion gain recorded in the month of September 2021, while the recent decrease puts the year-to-date gain at $6.42 billion.
While the reason for the recent decline still remains unclear, oil prices continue to trade above $80 per barrel at the global crude oil market.