#Naira Gains At Official Market Despite A Significant Drop In Forex Trading

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The exchange rate between the naira and the US dollar closed at N414.8/$1, at the official Investors and Exporters window, despite reduction on forex trading

Naira gained against the US dollar on Thursday after maintaining a rate of N415.1 in the previous trading session. The exchange rate on Thursday gained 0.07% to close at N414.8/$1 from N415.1/$1 recorded on Wednesday, 17th November 2021.

At the parallel market, naira also depreciated slightly to close at N546/$1 from N545/$1 recorded in the previous trading session.

This is according to information obtained from BDC operators interviewed by Nairametrics.

in the same vein, Nigeria’s foreign reserve recorded a marginal decline of 0.03% on Wednesday, 17th November to close at $41.42 billion compared to $41.43 billion recorded as of the previous day.

Trading at the official NAFEX window

Nairametrics also reported that the exchange rate at the Investors and Exporters window gained 0.07% to close at N414.8/$1 on Thursday, 18th November 2021 from N415.1/$1 recorded in the previous trading session.

The opening indicative rate closed at N413.19/$1 on Thursday, indicating a 55 kobo appreciation compared to N413.74/$1 recorded in the previous trading session.

An exchange rate of N444 to a dollar was the highest rate recorded during intra-day trading before it settled at N414.8/$1, while it sold for as low as N404/$1 during intra-day trading.

Forex turnover at the official window dropped by 69.8% to $90.18 million on Thursday.

According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window decreased from $298.88 million recorded on Wednesday, 17th November 2021 to $90.18 million on Thursday, 18th November 2021.

Cryptocurrency Analysis 

Bitcoin continues with a landslide drop, dropping by 4.6% on Thursday to close at $57,596.83 as of 11pm. The decline in the flagship crypto asset, triggered a 4.11% dip in the cryptocurrency market as the market capitalisation closed at $2.479 trillion. This implies that $106.18 billion was lost in the market.

Also, Ethereum dipped 6.31% on Thursday to close at $4,020.98, while XRP lost 4.61% to close at $1.04551.

The crypto market has also started on a bearish note on Friday as Bitcoin has fallen below $57k due to a 1.41% drop in the price.

Crude oil price watch

Brent Crude gained 1.03% on Thursday to close at $81.11 per barrel after enduring recurrent bearish trades earlier in the week. Similarly, West Texas Intermediate (WTI) gained marginally by 0.7% to close at $78.91 per barrel.

Meanwhile, Natural Gas gained 1.76% in price to close at $4.901, while OPEC Basket dipped 1.11% to close at $81.1 per barrel.

The US Energy Information Administration (EIA) projects that Brent oil price could fall to an average of $72 per barrel in 2022. This is due to the expected surplus on the market on the back of rising production from the United States and the OPEC+ group.

According to EIA’s latest monthly Short-Term Energy Outlook (STEO), global crude oil demand will exceed global supply through the end of this year, contribute to some additional inventory draws, and keep Brent Crude prices above $80 per barrel through December 2021.

Nigeria’s crude, Bonny Light dipped 1.11% to close at $80.78 per barrel, Brass River and Qua Iboe both declined by 1.09% to close at $80.54 per barrel.

External reserve

Nigeria’s foreign reserve dropped marginally by 0.03% to close at $41.42 billion as of Wednesday, 17th November 2021 compared to $41.43 billion recorded as of the previous day. The decline can be attributed to the continuous intervention of the apex bank in ensuring the stability of the exchange rate; a move that has seen the rate at the parallel market drop from N575/$1 to about N546/$1.

Meanwhile, the nation’s foreign reserve had gained $5.04 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.

The gain recorded in the previous month is higher than the $2.76 billion gain recorded in the month of September 2021. Meanwhile, Nigeria’s reserve has declined by $401.41 million so far in the month of November. On a year-to-date basis, the reserve has gained $6.04 billion.

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