Naira falls at official and P2P forex market despite boost in dollar turnover

Naira falls at official and P2P forex market despite boost in dollar turnover.

The exchange rate between the naira and the US dollar closed at N415.1/$1 at the Investors and Exporters (I&E) window, where forex is traded officially.

Naira fell against the US dollar on Christmas eve to close at N415.1/$1, representing a 0.09% depreciation when compared to N414.73/$1 recorded in the previous trading session. This is despite the 56.2% increase in the volume of traded forex in the market on Friday.

Meanwhile, naira remained flat at the parallel market, after closing at N572/$1 on Friday, same as recorded on Thursday, 23rd December 2021. This is according to information obtained from BDC operators interviewed by Nairametrics. On the other hand, exchange rate at the P2P market depreciated from N567/$1 recorded yesterday to trade at N568 in the early hours of Tuesday, 28th December 2021.

Nigeria’s foreign reserve reduced by 0.03% on Thursday, 23rd December to close at $40.59 billion compared to $40.6 billion recorded as of the previous day. The continuous decline in the nation’s external reserve is attributed to the intervention by the apex bank in the official forex market.

Trading at the official NAFEX window
The exchange rate at the Investors and Exporters window closed at N415.1/$1 on Friday, which represents a 0.09% depreciation compared to N414.73/$1 recorded a day before.

The opening indicative rate closed at N413.54/$1 on Friday, which represents a 23 kobo appreciation compared to N413.77/$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 N415.1/$1, while it sold for as low as N405/$1 during intra-day trading.
Forex turnover at the official window increased by 56.2% to $168.62 million on Friday, 23rd December 2021.
According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window increased from $107.92 million recorded on Thursday 23rd December 2021 to $168.62 million on Friday 24th December 2021.
Cryptocurrency watch
The cryptocurrency market resumed trading activities on Tuesday on a negative note, with a 3.08% decline in the industry’s market capitalisation to stand at $23.32 trillion as of press time. The movement in the market was largely due to the negative performances of Bitcoin and Ethereum, both recording losses as of the time of writing this article.

Flagship crypto asset and the largest crypto by market capitalisation, Bitcoin dipped 3.09% on Tuesday morning to trade at $49,155.4, while Ethereum also dipped 2.89% to trade at $3,920.6.

Meanwhile, the Central Bank of Russia (CBR) has been considering several approaches to curb the access to cryptocurrencies for domestic investors. According to Andrey Mikhaylishin, founder of a crypto project tested in the regulator’s sandbox, one of the options under consideration is to block card payments to crypto platforms.

On the flip side, the Turkish government is set to enact legislation that will promote the lawful use of cryptocurrencies in the country. This was made known by the Turkish president, Recep Tayyip Erdogan.

Crude oil price
The crude oil market traded bullish in the early hours of Tuesday as Brent Crude gained 3.78% to trade at $79.02 as of 12:00am, heading closer to cross the $80 per barrel market. Similarly, West Texas Intermediate also recorded a 2.41% gain to close at $75.57 per barrel, while natural gas surged by 8.82% to trade at $4.06 per barrel.

However, Opec Basket closed flat at $74.23 per barrel, while Nigerian crude products, Brass RIver and Qua Iboe also closed positive with 1.21% gain to close at $77.01 per barrel. Bonny Light also dipped 0.62% to close at $75.38 per barrel.

The bullish trades in recent session comes of the back of the API estimated inventory draw of 3.67 million barrels, taking the year-to-date drawback to 65 million barrels for the U.S. This has caused a buy interest in the global crude oil market, pushing the price of a barrel of oil above the $75 mark.

On the other hand, South Korea is set to release 3.17 million barrels of its oil reserves in the first quarter of 2022 as part of the U.S.-led global effort by major oil-consuming nations to lower prices by pumping oil into the market.

External reserve
Nigeria’s external reserve declined by 0.03% on Thursday, 23rd December 2021 to close at $40.59 billion, which represents a decline of $12.14 million compared to $40.6 billion recorded as of the previous trading day.

The decline in the country’s reserve level can be attributed to the continuous intervention of the apex bank in ensuring the stability of the exchange rate. The exchange rate at the official window as remained stable in the past four trading sessions.

It is worth noting that the nation’s foreign reserve had 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.

In the month of November, Nigeria’s external reserve lost $633.47 million in value as against a gain of $5.99 million recorded in the previous month and $2.76 million gain in September 2021. So far in the month of December, the reserve level has lost $598.9 million, while on a year-to-date basis, the reserve gain has reduced to $5.21 billion.

-Nairametrics