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Naira remains flat at official market as forex liquidity rises significantly by 134%

Friday, 22nd October 2021:  The exchange rate between the naira and the US dollar closed at N415.07/$1 at the Investors and Exporters window, where forex is traded officially. Naira remained stable on Friday against the US dollar to close at N415.07/$1. This was the same rate that was recorded on Thursday, 21st October 2021.

Also, naira appreciated against the US dollar on Friday to close at N574/$1, representing a 0.17% gain when compared to the N575/$1 that was recorded as of the close of trading activities on Thursday, 21st October 2021. This is according to information obtained by Nairametrics from BDC operators in Lagos.

The local currency remained flat at the official market as dollar supply rose significantly by 134%. Meanwhile, the International Monetary Fund (IMF) has attributed the decline in diaspora remittances into Nigeria to the uncertainty in the country’s foreign exchange market. Nigeria’s foreign reserve closed at $40.76 billion on Wednesday, 20th October 2021, representing a $377.04 million boost in the reserve position. The nation’s foreign reserve increased by 0.93% on Wednesday from $40.39 billion recorded as of the previous day.

Trading at the official NAFEX window

The exchange rate remained stable against the US dollar on Friday, 22nd October 2021 to close the day at N415.07 to a dollar, representing the same rate when compared to N415.07/$1 recorded on Thursday, 21st October 2021.

The opening indicative rate closed at N414.10/$1 on Friday, representing a 16 kobo drop when compared to N413.94/$1 recorded in the previous trading day.

An exchange rate of N429 to a dollar was the highest rate recorded during intra-day trading before it settled at N415.07/$1, while it sold for as low as N404/$1 during intra-day trading.

Meanwhile, forex turnover at the official window rose by 133.6% on Friday, 22nd October 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window increased from $103.16 million recorded on Thursday to $240.97 million on Friday 22nd October 2021.

Cryptocurrency watch

The world’s largest and most popular cryptocurrency, Bitcoin, closed trading activities on a bullish note on Sunday evening as it went up by 0.80% to trade at $61,582 amidst price fluctuation.

In the week that just ended, the total crypto market capitalization fell to a Monday low of $2.386 trillion before rising to a Thursday high $2.741 trillion. The total market capitalization on Sunday stood at $2.578 trillion.

Bitcoin’s dominance rose to a Wednesday high of 47.72% before falling to a Saturday low of 44.75%. At the time of writing, Bitcoin’s dominance stood at 44.80%.

Meanwhile, as China continues its crackdown on cryptocurrency, other countries are taking note of the development.

The second-largest cryptocurrency by market capitalization, Ethereum, was also up by 0.14% to trade at $4,136.31 on Sunday evening. XRP was up by 0.43% to trade at $1.10 on Sunday.

Crude oil price

The crude oil market was bullish on Sunday as most headline crude recorded increases with Brent crude going up by 0.14% later in the evening to trade at $85.65 per barrel after gaining earlier in the day.

The American headline crude, the WTI sustained its increase for the ninth consecutive week, extending its winning streak as market attention turned to the U.S. storage hub for crude, which is at a three-year low.

Saudi Arabia had earlier warned that oil producers should not take the recent rise in crude oil prices for granted because the coronavirus pandemic could still hit demand.

Meanwhile, Nigeria has thrown its weight behind Saudi Arabia’s effort for OPEC to resist pressure from other stakeholders and some countries to increase its production output.

The West Texas Intermediate (WTI) Crude was up by 0.42% to trade at $84.11 per barrel while natural gas was up by 5.44% to trade at $5.567. Similarly, the OPEC Basket was up by 0.07% to trade at $83.36 per barrel.

Also, Nigeria’s headline crude, Bonny Light was up by 1.60% to trade at $84.37 per barrel.

External reserve

Nigeria’s foreign reserve gained $195 million on Thursday, 21st October 2021 to close at $40.958 billion compared to $40.763 billion recorded as of the previous day. The latest increase represents a 0.48% increase in the country’s foreign reserve position.

The nation’s foreign reserve has gained $4.18 billion so far in October, on the back of the $4 billion raised by the federal government from the issuance of Eurobond in the international debt market. The gains recorded so far in the month is higher than the $2.76 billion gain recorded in the month of September 2021, while the recent increase puts the year-to-date gain at approximately $5.59 billion.

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