Breaking: Panic As Naira weakens at official and P2P markets despite improved FX demand

The exchange rate between the naira and the US dollar closed at N416.5/$1 at the official Investors and Exporters (I&E) window.

The exchange rate depreciated by 0.12% to close at N416.5/$1 on Wednesday, 16th February 2022 compared to N416/$1 recorded in the previous session. On the other hand, forex turnover increased by 37.36% to $130.73 million compared to $95.17 million recorded on Tuesday.

The exchange rate at the Peer-to-Peer (P2P) forex market depreciated marginally by 0.09% to trade at a minimum of N575.5 to a dollar on Thursday morning compared to N575.5/$1 recorded on Wednesday, 16th February 2022.

On the other hand, Naira remained flat at the parallel market, closing at N570/$1 on Wednesday, 16th February 2022. This is according to information obtained from BDC operators interviewed by Nairametrics.

Also, Nigeria’s external reserve dropped further on Tuesday, 15th February 2022 to close at $39.78 billion representing a 0.05% decline compared to $39.79 billion recorded as of the previous day. The reserve continues despite the upward trend in the price of crude oil.

Trading at the official NAFEX window

The exchange rate at the Investors and Exporters window closed at N416.5/$1 on Wednesday, 16th February 2022, which represents a 0.12% depreciation compared to N416/$1 recorded in the previous trading session

• The opening indicative rate closed to N415.79/$1 on Wednesday, which is 29 kobo higher than the N415.5/$1 recorded on Tuesday trading session.
• An exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N416.5/$1, while it sold for as low as N410/$1 during intra-day trading,
• Meanwhile, forex turnover at the official window increased by 37.36% to $130.73 million on Wednesday.
• According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window increased to $130.73 million on Wednesday from $95.17 million recorded on Tuesday 15th February 2022.

Crypto market

The crypto market resumed trading activities on Thursday, with a $2.54 billion appreciation in the industry market capitalization to stand at $1.95 billion. Flagship crypto asset grew by 0.16% as of press time on Thursday to trade at $43,963.

Ethereum also gained 0.13% to trade at $3,128.53, while Terra recorded a gain of 1.61% to trade at $56.985.

Meanwhile, Twitter reported that it has added Ethereum to its tipping feature following the bitcoin tips added earlier in September 2021. The move follows Twitter’s continued exploration of the Ethereum ecosystem. The company debuted non-fungible token (NFT) verification for paid “Twitter Blue” subscribers last month.

According to Coindesk, the Ethereum wallet support is available to all users who agree to the company’s tipping policy.

Crude oil price

The crude oil market resumed trading activities on Thursday morning on a negative note, following the bullish session on Wednesday, rising above $94.81 per barrel. As of the early hours of Thursday, Brent Crude has dipped 0.97% to trade at $93.89 per barrel.

Also, West Texas Intermediate (WTI) dipped 0.94% to trade at $92.78 per barrel, while Natural Gas gained 0.08% to trade at $4.71 a barrel. OPEC Basket however gained 2.02% to close at $94.73 per barrel.

Similarly, Bonny Light appreciated by 3.16% to close at $96.73 a barrel, while Nigerian crude products, Brass River and Qua Iboe both dipped by 2.57% to close at $96.53 per barrel. The bearish movement in the market came after the Energy Information Administration reported a crude oil inventory build of 1.1 million barrels for the week ended 11th February.

External reserve

Nigeria’s external reserve declined by 0.05% on Tuesday, 15th February 2022 to close at $39.78 billion, which represents a decline of $18.2 million from the $39.79 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 now depreciated by $743.59 million despite the rally at the global crude oil market.