Monday, December 4

Naira falls at P2P forex market as official turnover drops by 29%

Wednesday, 29th December 2021: The exchange rate between the naira and the US dollar at the official Investors and Exporters (I&E) window closed at N415/$1.

Naira recorded a marginal gain against the US dollar following the resumption of trading activities after the Christmas break. The exchange rate closed at N415/$1 on Wednesday, 29th December 2021, representing a 0.02% appreciation when compared to N415.1/$1 recorded in the previous trading session. This is despite the 29.1% drop in the volume of traded forex in the market on Wednesday.

In the same vein, naira gained at the parallel market, after closing at N569/$1 on Wednesday, which is a 0.52% appreciation compared to N572/$1 recorded on Friday of the previous week. This is according to information obtained from BDC operators interviewed by Nairametrics.

On the other hand, exchange rate at the P2P market depreciated from N568.2/$1 recorded on Wednesday, 29th December 2021 to trade at N570.2 in the early hours of Thursday, 30th December 2021. Naira has witnessed continent decline in the past week, dropping from N560.95/$1 recorded before the Christmas break to trade for as high as N571.4/$1 at the P2P market.

Similarly, Nigeria’s foreign reserve reduced by 0.03% on Friday, 24th December to close at $40.58 billion compared to $40.59 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 on Wednesday, 29th December 2021, which represents a 0.02% marginal appreciation compared to N415/$1 recorded before the Christmas break.

  • The opening indicative rate closed at N414.05/$1 on Wednesday, which represents a 49 kobo depreciation compared to N413.54/$1 recorded in the previous trading session.
  • An exchange rate of N446.5/$1 was the highest rate recorded during intra-day trading before it settled at N415/$1, while it sold for as low as N405/$1 during intra-day trading.
  • Forex turnover at the official window decreased by 29.1% to $119.48 million on Wednesday, 29th December 2021.
  • According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window dropped from $168.62 million recorded on Friday 24th December 2021 to $119.48 million on Wednesday 29th December 2021.

Cryptocurrency watch

The cryptocurrency market traded bearish on Wednesday, having lost about $27.59 billion in value, representing a 1.23% depreciation to close at $2.22 trillion. The negative direction of the market was triggered by the bearish sell sentiment of bitcoin investors, leading to a 0.66% decline to close at $47,228.58.

Similarly, Ethereum lost 1.82% in value on Wednesday to close at $3,724.22, while Solana dipped by 2.05% to close at $173.635. Luna dipped 1.32%, while Uniswap recorded a 4.57% decline to close at $17.56.

Nairametrics had reported that Bitcoin lost about $3k on Tuesday on the back of liquidations at the crypto market, which exceeded $370 million on the day under review. For the day 129,644 traders were liquidated at the Crypto futures market. The largest single liquidation order happened on Bybit, valued at $5 million

Crude oil price

The crude oil market closed on a positive note on Wednesday, as Brent Crude, a benchmark crude product used in measuring the performance of the market gained 0.43% to close at $79.28 following a report of another crude inventory draw.

The Energy Information Administration (EIA) reported an inventory draw of 3.6 million barrels for the Christmas week compared to the report of the American Petroleum Institute, which estimates crude oil inventory draw of 3.09 million barrels for the same week.

Also, West Texas Intermediate crude product gained 0.8% in price to close at $76.59 per barrel on Wednesday, while natural gas on the other hand dipped by 1.5% to close at $3.994. The OPEC basket has remained flat for the past one week at $74.23 per barrel of crude.

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. It is worth noting that the data on the price for the Nigerian crude products are 5 days delayed.

External reserve

Nigeria’s external reserve declined by 0.03% on Friday, 24th December 2021 to close at $40.58 billion, which represents a decline of $12.08 million as against $40.59 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.

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. So far in the month of December, the reserve level has lost over $600 million, while on a year-to-date basis, the reserve gain has reduced to $5.2 billion.