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Exchange Rate Weakens At P2P Market As Oil Price Edges Towards $100

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Exchange Rate Weakens At P2P Market As Oil Price Edges Towards $100

Exchange Rate Weakens At P2P Market As Oil Price Edges Towards $100
February 14
15:36 2022

Friday, 11th February 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 recorded a rebound on Friday as it appreciated by 0.16% against the US dollar to close at N416/$1 compared to N416.67/$1 recorded in the previous trading session. This is despite the 22.87% decline in the amount of traded FX in the official market to $84.65 million.

Likewise, Naira appreciated by 0.52% on Friday to close at N570/$1 as opposed to N573/$1 trading rate recorded in the past two trading sessions. This is according to information obtained from BDC operators interviewed by Nairametrics.

On the flip side, the exchange rate started downwards at the Peer-to-Peer (P2P) forex market, trading at a minimum of N575.1 to a dollar on Monday morning. This represents a 0.192% depreciation compared to N574/$1 recorded on Friday, 11th February 2022.

Also, Nigeria’s external reserve dropped further on Thursday, 10th February 2022 to close at $39.87 billion. Representing a 0.06% decline compared to $39.89 billion recorded as of the previous day. The reserve continues despite the upward trend in the price of crude oil, already trading above $95 per barrel and edging closer to hitting the $100 per barrel mark.

Trading at the official NAFEX window
The exchange rate at the Investors and Exporters window closed at N416/$1 on Friday, 11th February 2022, which represents a 0.16% appreciation compared to N416.67/$1 recorded in the previous trading session

The opening indicative rate closed to N415.31/$1 on Friday, which represents a 46 kobo appreciation compared to N415.77/$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 N416/$1, while it sold for as low as N410/$1 during intra-day trading.

Meanwhile, forex turnover at the official window decreased by 22.87% to $84.65 million on Friday.
According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window dropped to $84.65 million on Friday from $109.75 million recorded on Thursday 10th February 2022.

Crypto market
The crypto market started trading activities on Monday on a negative note with the industry shedding $3.99 billion in the early hours of the day despite Bitcoin, the most capitalized crypto-asset gaining 0.41% to trade at $42,249.82.

On the other hand, Ethereum dipped marginally by 0.07% on Monday morning to trade at $2,870.99 while Solana gained 1.5% to trade at $94.245.

Meanwhile, Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), has stated that crypto assets and stablecoins are no match for well-designed central bank digital currencies (CBDCs).

“If CBDCs are designed prudently, they can potentially offer more resilience, more safety, greater availability, and lower costs than private forms of digital money,” she stated.

Meanwhile, the Department of Justice (DoJ) in the United States announced that they have made arrests and seized $3.6 billion worth of Bitcoin from the hackers who stole 119,756 BTC from the cryptocurrency exchange Bitfinex, six years ago

Crude oil price set for $100
The global crude oil market has maintained a bullish stance, breaking past $95 per barrel and edging closer to the $100 per barrel threshold. Brent Crude started the early trading hours of the new week on a positive note with 1.16% appreciation to trade at $95.54 per barrel.

Similarly, American oil benchmark, West Texas Intermediate (WTI) rose by 1.28% on Monday morning to trade at $94.29 per barrel, with the price of natural gas appreciating by 3.98% to trade at $4.098.

The market remains bullish amidst the sustained tension between Russia and Ukraine. Meanwhile, the foreign minister of Ukraine, Dmytro Kuleba said that Russia had ignored formal requests to explain the build-up of 100,000 soldiers on Ukraine’s borders. Although, Russia had denied any plans to invade Ukraine despite the build-up of troops at the border, according to BBC.

The price of OPEC basket also appreciated by 1.12% to close at $92.87 per barrel, four days ago, While Bonny Light gained 0.44% to close at $94.57 a barrel. Nigeria’s crude products, Brass River and Qua Iboe followed the same path with a 0.5% appreciation to close at $94.22 per barrel.

External reserve
Nigeria’s external reserve dropped by 0.06% on Thursday, 10th February 2022 to close at $39.87 billion, which represents a decline of $23.5 million from the $39.89 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 declined by $648.7 million despite the rally at the global crude oil market.

 

 

– Nairametrics

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Opeyemi

Opeyemi

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