Naira Gains As Nigeria’s Foreign Reserve Plunges Below $39 Billion

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Naira has gained as Nigeria’s Foreign Reserve plunged below $39 Billion.

Eko Hot Blog reports that the exchange rate between the naira and the US dollar closed at N418.5/$1 at the official Investors and Exporters (I&E) window, appreciating by 0.71% from N421.5/$1 recorded the previous day.

Naira gained against the US dollar on Tuesday, following the record-high depreciation recorded in the previous trading session. Likewise, FX turnover improved by 48.7% to $105.1 million in contrast to $70.68 million that exchanged hands on Monday.

On the flip side, the exchange rate against the US dollar depreciated by 0.5% on Wednesday morning at the peer-to-peer market, trading at a minimum of N603/$1 compared to N600/$1 recorded as of the same time the previous day.

Meanwhile, the exchange rate at the parallel market remained stable at N590 to a dollar. This is according to information obtained from BDCs operating in Nigeria.

Nigeria’s external reserve however fell below the $39 billion thresholds on Monday as the level recorded a 0.24% decline to stand at $38.92 billion from $39.01 billion recorded as of the previous day. The last time Nigeria’s external reserve level was below $39 billion was seven months ago, 8th Oc tober 2021 specifically.

The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Trading at the official NAFEX window

Naira gained 71 basis points against the US dollar on Tuesday, to close at N418.5 to a dollar.

The opening indicative rate closed at N417.42$1 Tuesday 17th May 2022, 12 kobo depreciation compared to N417.3/$1 recorded on Monday, 16th May 2022.
Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N418.5/$1, while it sold for as low as N410/$1 during intra-day trading,
A total of $105.11 million in FX value exchanged hands at the official Investors and Exporters window on Tuesday.
According to the data from the FMDQ, forex turnover improved by 48.71% from $70.68 million recorded on Monday to $105.11 million on Tuesday, 17th May 2022.

Crypto market update

Bearish sentiments returned to the cryptocurrency market on Wednesday morning. With the industry market capitalization shedding 1.46% to stand at $1.281 trillion, after the flagship crypto asset and the largest crypto by market capitalization dipped 1.51% to trade at $29,967.22.

The second most capitalized crypto asset, Ethereum also followed suit with a 2.31% decline as of press time on Wednesday to trade at $2,040.65. Solana also lost 2.61% to trade at $55.5175.

FURTHER READING

LUNAUSD recorded a 0.68% downturn to trade at $0.00018506, while Uniswap having recorded a 3.84% dip, trades at $5.26.

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Damilare Abass