Thursday, 19th May 2022: The exchange rate between the naira and the US dollar closed at N420.33/$1 at the official Investors and Exporters (I&E) window.
Naira grew weaker on Thursday with a 0.26% depreciation to close at N420.33/$1 compared to N419.25/$1 recorded on Wednesday. Recall that the exchange rate had recorded a 0.18% fall on Wednesday. The recent depreciation follows a crash in the amount of FX liquidity.
Notably, FX supply declined by 62.47% to $75.56 million on Thursday, 19th May 2022 from $201.34 million traded in the previous trading session.
Similarly, the exchange rate against the US dollar gained marginally by 0.17% on Friday morning at the peer-to-peer market, trading at a minimum of N604/$1 compared to N605/$1 recorded as of the same time the previous day.
Also, the exchange rate at the parallel market depreciated significantly on Thursday, falling by 2.37% to trade at N604/$1 compared to N590/$1 recorded in the previous trading session. This is according to information obtained from BDCs operating in Nigeria.
Nigeria’s external reserve fell further on Wednesday, dropping by 0.11% to stand at $38.84 billion as against the $38.88 billion recorded the previous day. The last time Nigeria’s external reserve level was below $39 billion was seven months ago, 8th October 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 depreciated against the US dollar on Thursday by 0.26% to close at N420.33/$2 compared to N419.25/$1 recorded on Wednesday.
- The opening indicative rate closed at N417.7/$1 on Thursday 19th May 2022, 30 kobo appreciation compared to N418/$1 recorded on Wednesday, 18th May 2022.
- Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N420.33/$1, while it sold for as low as N410/$1 during intra-day trading,
- A total of $75.56 million in FX value exchanged hands at the official Investors and Exporters window on Thursday.
- According to the data from the FMDQ, forex turnover dropped by 62.47% from $201.34 million recorded on Wednesday to $75.56 million on Thursday, 19th May 2022.
Crypto market update
The crypto market recorded a rare bullish session on Thursday as the market capitalization rallied by 4.03% to close at $1.264 trillion after bitcoin gained 5.15% to close above the $30k threshold.
Ethereum also recorded a 4.8% gain to close at $2,003, Solana gained 2.95% to trade at $51.28, while Uniswap gained 3.89% to trade at $5.07.
Meanwhile, the new SEC crypto and digital asset regulation has drawn several reactions, both positive and negative remarks from crypto enthusiasts across the country and outside the shores of the country. Some of these players in the digital asset space have commended the SEC for a first step while some of the analysts believe the regulation has some sore points in the draft.