Wednesday, February 21

Naira gains at P2P and Official markets as FX turnover drops to two-week low

Friday, 28th January 2022: The exchange rate between the naira and the US dollar closed at N416/$1 at the Investors and Exporters (I&E) window, where forex is traded officially.

Naira gained against the US dollar on Friday to its highest level during the week to close at N416/$1, representing a 0.08% appreciation compared to N416.33/$1 recorded in the previous trading session, indicating a year-to-date average rate of N416.62/$1.

Similarly, exchange rate at the Peer-to-Peer (P2P) market appreciated significantly to its highest level in over three weeks, trading at N570/$1 in the early hours of Monday 31st January 2022.


Forex turnover at the official market decreased by 28.5% to $81.29 million as opposed to the $113.71 million recorded in the previous trading session. This represents the lowest turnover at the official FX market in over two weeks.

  • On the other hand, the exchange rate appreciated by 1.687% at the P2P market on Monday morning, trading at a minimum of N570/$1 compared to N579.78/$1 recorded on Friday 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 $32.7 million on Thursday to close at $40.15 billion as of 27th January 2022, representing a 0.08% decline compared to $40.18 billion recorded as of 26th January 2022.

Trading at the official NAFEX window

The exchange rate at the Investors and Exporters window closed at N416/$1 on Friday, 28th January 2022, which represents a 0.08% appreciation compared to N416.33/$1 recorded in the previous trading session

  • The opening indicative rate closed at N415.42/$1 on Friday, which represents 32 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 N416/$1, while it sold for as low as N405/$1 during intra-day trading.
  • Forex turnover at the official window decreased by 28.5% to $81.29 million on Friday, 28th January 2022.
  • According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window dropped from $113.71 million recorded on Thursday 27th January 2022 to $81.29 million on Friday 28th January 2022.

Cryptocurrency watch

The cryptocurrency market trades bearish on Monday as the market capitalization has dipped 2.15% to stand at $1.66 trillion, indicating a loss of $36.97 billion to crypto investors.

Flagship crypto asset, bitcoin also recorded a 2.02% decline in price to trade at $37,164.75, while Ethereum with a 2.74% decline in price trades at $2,531.21.

Also, Tera dropped by 1.28% on Monday morning to trade at $45.7042476 while Uniswap recorded a 2.96% downtrend to trade at $10.48.

Meanwhile, 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.

Crude oil maintains bullish market

The crude oil market continued its bullish trend in the new week, capitalizing on the stellar upward trajectory recorded in the previous week, where Brent crude hit $90 per barrel. On Monday morning, the price of Brent Crude had gained 1.02% to trade at $90.95 per barrel on the back of inventory draws and the prolonged stand-off between Russian and Ukraine.

West Texas Intermediate also gained 1.81% to trade at $87.7 per barrel, while Natural gas at $5 recorded a 7.78% gain as of the early hours of Monday (1:29am, Nigerian time).

Meanwhile, the OPEC+ group is expected to decide next week whether it should continue unwinding the oil production cuts by another 400,000 barrels per day (bpd) in March. This is following the resilience of the market despite the growing concerns of the covid-19 in importing nations.

Nigerian crude product, Brass RIver and Qua Iboe both gained 0.88% to trade at $90.44 per barrel as of Friday, 28th January 2022, while Bonny Light already trades above $91.38 per barrel.

External reserve

Nigeria’s external reserve dropped by 0.08% on Thursday, 27th January 2022 to close at $40.15 billion, which represents a decline of $32.7 million from the $40.18 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.

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. In December 2021, the reserve dipped by $66.17 million, while in January 2022 a total of $369.56 million has been lost in the reserve level.