Wednesday, 26th January 2022: The exchange rate between the naira and the US dollar at the official Investors and Exporters (I&E) window closed at N416.25/$1, while it traded as high as N444/$1 before settling lower.
Naira gained further against the US dollar on Wednesday albeit a marginal appreciation of 0.02% to close at N416.33/$1 compared to N416.25/$1 recorded in the previous trading session.
The exchange rate has maintained an average of N416.69 to a dollar since the beginning of the new year.
Highlights
Forex turnover at the official market increased by 28.9% to $123.13 million as against the $95.52 million recorded in the previous trading session.
- On the other hand, exchange rate fell to N582.5/$1 at the P2P market on Thursday morning, trading at a minimum of N582.5/$1 compared to N580/$1 recorded on Wednesday.
- Naira closed flat at N568/$1 at the parallel market, the same as recorded in the previous trading session. This is according to information obtained from BDC operators interviewed by Nairametrics.
- Nigeria’s foreign reserve declined by $26.77 million on Tuesday to close at $40.21 billion as of 25th January 2022, representing a 0.07% decline compared to $40.24 billion recorded as of 24th January 2022.
Trading at the official NAFEX window
The exchange rate at the Investors and Exporters window closed at N416.25/$1 on Wednesday, 25th January 2022, which represents a 0.02% appreciation compared to N416.33/$1 recorded in the previous trading session
- The opening indicative rate closed at N415.36/$1 on Wednesday, which represents 15 kobo depreciation compared to N415.21/$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 N416.25/$1, while it sold for as low as N410/$1 during intra-day trading.
- Forex turnover at the official window increased by 28.9% to $123.13 million on Wednesday, 26th January 2022.
- According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window improved from $95.52 million recorded on Tuesday 25th January 2022 to $123.13 million on Wednesday 26th January 2022.
Cryptocurrency watch
The cryptocurrency market suffered a downturn on Wednesday, triggered by the sell-off sentiments in the two biggest crypto assets by market capitalization, bitcoin and Ethereum. In the early hours of Thursday, bitcoin had lost 0.99% to trade at $36,465 drawing the industry market capitalization to $1.623 trillion.
On the other hand, Ethereum suffered a 1.13% decline to trade at $2,437.15 and Solana dipped 2.41% to trade at $89.9425. Meanwhile, Tera recorded a gain of 1.13% on Thursday morning to trade at $59.4357576 while Uniswap recorded a 1.89% downtrend to trade at $10.38.
The bearish movement in the market is following the announcement on Wednesday regarding reducing balance sheet size by the US Federal Reserve.
Crude oil hits $90 per barrel
The crude oil market continued its bullish trend on Wednesday after Brent Crude hit $90 per barrel as the tension between Russia and Ukraine, supply tightening, and inventory draw pushed brent crude up by about 2% during intra-day trading.
Meanwhile, the OPEC+ group is expected to decide next week whether it should continue unwinding the oil production cuts by another 400,000 barrels per day (bpd) in March. This is following the resilience of the market despite the growing concerns of the covid-19 in importing nations.
External reserve
Nigeria’s external reserve dropped by 0.07% on Tuesday, 25th January 2022 to close at $40.21 billion, which represents a decline of $26.77 million from the $40.24 billion recorded as of the previous day.
The continuous decline in the country’s reserve level can be attributed to the Central Bank’s intervention in the official market in ensuring the stability of the exchange rate. It is worth noting that the nation’s foreign reserve 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.
However, in the month of November, Nigeria’s external reserve lost $611.01 million in value as against a gain of $5.99 million recorded in the previous month and a $2.76 million gain in September 2021. In December 2021, the reserve dipped by $66.17 million, while in January 2022 a total of $307.19 million has been lost in the reserve level.