Naira depreciates at official market despite 79% improvement in forex liquidity
Thursday, 28th October 2021: The exchange rate between the naira and the US dollar closed at N415.10/$1 at the Investors and Exporters window, where forex is traded officially.
Naira depreciated marginally on Thursday against the US dollar to close at N415.10/$1. This represents a 0.01% loss when compared to the N415.07 that was recorded on Wednesday, 27th October 2021. The local currency was weakened at the official market despite a 79% increase in forex liquidity.
Meanwhile, the naira appreciated against the US dollar on Thursday at the parallel market to close at N568/$1, representing a N2 gain when compared to the N570/$1 that was recorded as of the close of trading activities the previous day. This is according to information obtained by Nairametrics from BDC operators in Lagos.
Trading at the official NAFEX window
The exchange rate depreciated against the US dollar on Thursday, 28th October 2021 to close the day at N415.10 to a dollar, representing a 3 kobo drop when compared to N415.07/$1 recorded on Wednesday, 27th October 2021.
The opening indicative rate closed at N414.13/$1 on Thursday, representing a 31 kobo gain when compared to N414.44/$1 recorded in the previous trading day.
An exchange rate of N444 to a dollar was the highest rate recorded during intra-day trading before it settled at N415.10/$1, while it sold for as low as N405/$1 during intra-day trading.
Meanwhile, forex turnover at the official window rose by 78.9% on Thursday, 28th October 2021.
According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window increased from $147.44 million recorded on Wednesday to $263.70 million on Thursday 28th October 2021.
Bitcoin rose toward $61,000 on Thursday, albeit within a choppy trading range as analysts have mixed views about the short-term direction of BTC’s price, which has been positive over the past 24 hours.
The world’s largest and most popular cryptocurrency, Bitcoin, was up 4.51% as at the time of this report to trade at $61,545.77 as El Salvadorian President Nayib Bukele tweeted that his government had “bought the dip,” adding an additional 420 BTC to the treasury, the equivalent of around $25 million.
That purchase was one reason behind the price bounce. Bitcoin’s price has recorded huge losses over the past few days after failing to sustain the all-time high around $66,900 last week.
The total crypto market volume over the last 24 hours was $142.61 billion. This is a whopping 43.84 per cent increase in 24 hours, mostly due to the huge amount of the anonymous Shiba Inu token purchase.
Meanwhile, the second-largest cryptocurrency by market capitalization, Ethereum, returned above $4,000 on Thursday.
At the time of this report, Ethereum was up by 9.16% to trade at $4,357.99, while XRP rose by 7.38% to trade at $1.07.
Crude oil price
Oil ended the day with higher prices with Brent crude rising by 0.23% to trade at $84.51 per barrel as OPEC and its allies expect a tighter global oil market in the fourth quarter.
Futures in New York closed higher by 0.2 per cent on Thursday, erasing earlier losses. World oil inventories will decline by an average of 1.1 million barrels a day in the fourth quarter, according to a source familiar with preliminary figures evaluated by the OPEC+ Joint Technical Committee.
Crude has eased off of multiyear highs in recent days yet still remains elevated. European natural gas prices dropped after President Vladamir Putin signalled that Russia will send extra gas to the continent next month.
Also, Iran and the European Union agreed to restart negotiations on a revival of the 2015 nuclear accord, signalling a greater prospect of Iranian barrels coming back to the market.
At the time of writing this report, the West Texas Intermediate (WTI) Crude dropped by 0.06% to trade at $82.76 per barrel, while natural gas dropped further by 1.78% to trade at $5,679. However, the OPEC Basket was up by 1.32% to trade at $84.52 per barrel.
Meanwhile, Nigeria’s headline crude, Bonny Light, was down by 1.38% to trade at $83.05 per barrel.
Nigeria’s foreign reserve gained $54 million on Wednesday, 28th October 2021 to close at $41.807 billion compared to $41.753 billion recorded as of the previous day. The latest increase represents a 0.13% increase in the country’s foreign reserve position.
The nation’s foreign reserve has gained $5.01 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 are 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 $6.44 billion.