Naira weakens as demand for dollar rises at I&E window

Naira depreciated further against the US dollar on Monday with a 0.04% fall to close at N416.5/$1 compared to N416.33/$1 recorded as of the close of trading activities on Friday, 4th February 2022.

Naira weakened on Monday despite the 84.8% increase in FX turnover at the official window.

Similarly, the exchange rate depreciated marginally at the Peer-to-Peer (P2P) forex market, trading at a minimum of N574.5 to a dollar on Tuesday morning compared to N574.27/$1 recorded in the previous trading session.

Also, Naira closed lower at the parallel market on Monday 7th February 2022, to close at N570/$1 compared to N568/$1 recorded in the previous trading session.

READ ALSO: External reserves suffer another depletion as CBN struggles to defend Naira

Nigeria’s foreign reserve reduced marginally by $2.22 million on Friday to close at $39.98 billion as of 4th February 2022, representing a 0.006% decline compared to $39.982 billion recorded as of the previous day.

The exchange rate at the Investors and Exporters window closed at N416.5/$1 on Monday, 4th February 2022, which represents a 0.04% depreciation compared to N416.33/$1 recorded in the previous trading session

The opening indicative rate closed at N415.42/$1 on Monday, which represents a 9 kobo improvement compared to N415.51/$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 N416.5/$1, while it sold for as low as N404/$1 during intra-day trading, the lowest so far in the year.

READ ALSO: Naira suffers more devaluation against Dollar

Forex turnover at the official window recorded massive boost on Monday as it increased by 84.54% to $125.1 million.

Meanwhile, the crude oil market closed red on Monday, Brent, WTI, Natural gas, and Heating oil all recording a downtrend in their prices. Notably, Brent Crude having climbed above $93 per barrel on Sunday, dipped by 0.35% to close at $92.94 per barrel on Tuesday.

Similarly, West Texas Intermediate (WTI), the US oil benchmark dropped by 0.74% to close at $91.63 per barrel, while Natural gas recorded a price decline of 6.39% to close at $4.28 per barrel. On the other hand, however, Nigerian crude Bonny Light gained 4.05% to close at $95 per barrel.

Also, the price of a barrel of OPEC Basket appreciated by 2.95% to close at $92.84 while gasoline price improved by 0.49% to close at $2.692 on Monday.

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 external reserve gained $5.99 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.