Tuesday, 1st February 2022: The exchange rate between the naira and the US dollar closed at N415.75/$1 at the official Investors and Exporters (I&E) window.
Naira depreciated against the US dollar on Tuesday with a 0.1% downtrend to close at N415.75/$1 compared to N415.33/$1 recorded as of the close of trading activities on Monday, 31st January 2022.
On the other hand, the exchange rate at the Peer-to-Peer (P2P) market appreciated marginally by 0.262% to trade at N570/$1 on Wednesday morning compared to N571.5/$1 in the previous trading day.
Highlights
Forex turnover at the official market surged by 73.9% to $165.3 million compared to $95.07 million recorded in the previous trading session.
- On the other hand, the exchange rate appreciated marginally by 0.262% at the P2P market on Wednesday morning, trading at a minimum of N570/$1 compared to N571.5/$1 recorded on Tuesday morning.
- 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 $80.55 million on Monday to close at $40.04 billion as of 31st January 2022, representing a 0.2% decline compared to $40.12 billion recorded as of 28th January 2022. This means that the external reserve declined by $481.4 million in January 2022.
Trading at the official NAFEX window
The exchange rate at the Investors and Exporters window closed at N415.75/$1 on Tuesday, 1st February 2022, which represents a 0.1% depreciation compared to N416.33/$1 recorded in the previous trading session
- The opening indicative rate closed at N415.18/$1 on Tuesday, which represents 8 kobo depreciation compared to N415.1/$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 N415.75/$1, while it sold for as low as N408/$1 during intra-day trading.
- Forex turnover at the official window increased by 73.9% to $165.3 million on Tuesday, 1st February 2022.
- According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window improved from $95.07 million recorded on Monday 31st January 2022 to $165.3 million on Tuesday 2nd January 2022.
Cryptocurrency watch
The crypto market traded positively on Tuesday, closing with a 1.6% gain to close at $1.756 trillion, indicating a $27.68 billion appreciation for the crypto market capitalisation. In the same vein, the most valuable crypto asset, bitcoin gained 0.89% to close at $38,835.7.
Also, Ethereum recorded a gain of 4.1% to close at 2,799.88, while Solana rallied with a 11.81% gain to close at $111.3125. Tera on the other hand dipped 0.4% on Tuesday to close at $51.9652057 while Uniswap recorded a 4.92% downturn to trade at $11.2.
The world largest crypto exchange, Binance has restricted the personal accounts of 281 Nigerian users based on security concerns. The CEO of the exchange noted in a letter to its Nigerian customers that the decision to restrict some personal accounts was to ensure user safety while more than a third of the affected accounts were restricted at the request of international law enforcement.
Meanwhile, the finance minister of India, Nirmala Sitharaman has proposed taxing income from cryptocurrencies and other digital assets at 30%. She pointed out that there has been a phenomenal increase in the transaction in virtual digital assets.
Crude oil market
The crude oil market has witnessed minimal movement in the past few days as Brent Crude is trading at $89.16 per barrel, which is the same as recorded on Tuesday. However, West Texas Intermediate has gained 0.03% on Wednesday to trade at $88.23 a barrel.
As of the early hours of Wednesday, Natural gas had gained 3.87% to trade at $4.935 per barrel. Meanwhile, the American Petroleum Institute (API) estimated the inventory draw this week for crude oil to be 1.645 barrels after analysts predicted a build of 1.833 million barrels.
In the previous week, the API reported a draw in crude oil inventories of 872,000 barrels after analysts had predicted a draw of 400,000 barrels.
OPEC+ closed at $90.89 per barrel, representing a 0.83% gain, Bonny Light closed with a 0.66% gain to close at $91.08 a barrel while Nigeria’s crude products, Brass River and Qua Iboe both gained 0.1% to close at $91.29 per barrel.
External reserve
Nigeria’s external reserve dropped by 0.2% on Monday, 31st January 2022 to close at $40.04 billion, which represents a decline of $80.55 million from the $40.12 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 and the inability of Nigeria to meet crude oil production quota.
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.
Nigeria’s reserve level declined by $481.37 million in January 2022 following the $66.17 million dip recorded in the previous month.
