Tuesday, 8th February 2022: The exchange rate between the naira and the US dollar closed at N416.67/$1 at the official Investors and Exporters (I&E) window.
Naira weakened further against the US dollar on Tuesday with a 0.04% fall to close at N416.67/$1 compared to N416.5/$1 recorded as of the close of trading activities on Monday, 7th February 2022. Naira depreciated at the official window despite the decrease in the demand for dollar.
On the other hand, Naira appreciated marginally at the parallel market on Tuesday 8th February 2022, to close at N569/$1 compared to N570/$1 recorded in the previous trading session. This is according to information obtained from BDC operators interviewed by Nairametrics.
Similarly, the exchange rate appreciated at the Peer-to-Peer (P2P) forex market, trading at a minimum of N574.17 to a dollar on Wednesday morning. This represents a 0.057% uptick as opposed to N574.5/$ recorded in the previous trading session.
Meanwhile, Nigeria’s foreign reserve continued with a downtrend having reduced by 0.093% to close at $39.94 billion as of Monday, 7th February 2022.
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Trading at the official NAFEX window
The exchange rate at the Investors and Exporters window closed at N416.67/$1 on Tuesday, 8th February 2022, which represents a 0.04% depreciation compared to N416.5/$1 recorded in the previous trading session
- The opening indicative rate jumped to N415.98/$1 on Tuesday, which represents a 56 kobo depreciation compared to N415.42/$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 N416.67/$1, while it sold for as low as N410/$1 during intra-day trading,
- Meanwhile, forex turnover at the official window dropped by 40.4% to $74.56 million on Tuesday.
- According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window decreased from $125.1 million recorded on Monday 7th February 2022 to $74.56 million on Tuesday 8th February 2022.
The cryptocurrency market is still clouded by bearish sentiment as the industry market capitalization shed $14.48 billion on Tuesday, with a further $8.9 billion loss in the early hours of Wednesday. Bitcoin in the same manner dipped marginally by 0.765% on Wednesday morning to trade at $43,792.84.
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In the same vein, the second most capitalized asset, Ethereum dipped 0.58% on Wednesday morning to trade at $3,098.15, while Solana dipped 2.06% to trade at $111.185.
Nairametrics had reported that investors are re-embracing risk assets across global markets as Bitcoin gains for a fifth consecutive day, the longest winning streak since September. Investors are going bullish on reports that reveal KPMG’s Canadian branch has provided its corporate Treasury with its first cryptocurrency asset allocation.
However, the market continues to trade bearish on account of sell sentiment by crypto investors.
Crude oil market
The crude oil market closed red on Tuesday, following a bearish trade the previous day as major crude products such as Brent, WTI, Natural gas, and Heating oil all recorded a downtrend in their prices. Notably, Brent Crude having climbed above $93 per barrel on Sunday, dipped by 1.5% to close at $91.3 per barrel on Tuesday and has fallen further to $90.16 in the early trading hours of Wednesday.
Similarly, West Texas Intermediate (WTI), the US oil benchmark dropped by 1.6% to close at $89.86 per barrel, while Natural gas recorded a price decline of 0.61% to close at $4.206 per barrel. In the same vein, Nigerian crude Bonny Light dipped 0.36% to close at $94.66 per barrel.
Also, the price of a barrel of OPEC Basket depreciated by 0.84% to close at $95.82 per barrel. The bearish movement in the crude oil market has been attributed to the renewed fears that Iran and the United States could be close to a nuclear deal that could unleash more legal barrels of oil from the currently sanctioned nation.
Meanwhile, the American Petroleum Institute (API) estimated the inventory draw this week for crude oil to be 2.025 million barrels bringing the total inventory draws of the US to about 78 million barrels since the beginning of 2021.
Nigeria’s external reserve dropped further by 0.0% on Monday, 7th February 2022 to close at $39.94 billion, which represents a decline of $37.16 million from the $39.98 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. Although it is worth noting that the decline has been very minimal in recent times, largely attributable to the rally in crude oil prices.
Nigeria’s reserve level declined by $481.37 million in January 2022 following the $66.17 million depreciation recorded in the previous month. Meanwhile, year-to-date, Nigeria’s reserve has declined by $577 million despite the rally at the global crude oil market.