Exchange rate weakens across FX markets as demand pressure persists

Friday, 4th March 2022: The exchange rate between the naira and the US dollar closed at N416.67/$1 at the official Investors and Exporters (I&E) window.

The exchange rate at the I&E window fell on Friday to close at N416.67/$1, representing a 0.04% depreciation compared to N416.5/$1 recorded in the previous trading session. Forex turnover at the official market however declined by 17.89% to $115.26 million.

Meanwhile, the exchange rate at the parallel market depreciated by 0.35% to close at N580/$1 from N578 to a dollar recorded on Thursday, 3rd March 2022. This is according to information obtained from BDC operators interviewed by Nairametrics.

In the same vein, the exchange rate at the Peer-to-Peer (P2P) forex market depreciated by 0.77% to trade at a minimum of N578.4/$1 in the early hours on Friday, 4th March 2022 compared to N574/$1 recorded on Thursday morning. Meanwhile, the exchange rate at the P2P market gained to N576 as of the close of trade on Friday.

The depreciation of the naira against the US dollar is attributed to increased demand for FX in the non-official markets, while the marginal downturn at the I&E window is the usual managed movement, floating between N415/$1 and N416.67$1.

Trading at the official NAFEX window

The exchange rate at the Investors and Exporters window closed at N416.67/$1 on Friday, 4th March 2022, a 0.04% depreciation from N416.5 to a dollar recorded on Thursday.

• The opening indicative rate closed at N415.7/$1 on Friday, representing a 27 kobo appreciation compared to the N415.97/$1 recorded on Thursday, 3rd March 2022.
• An exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N416.67/$1, while it sold for as low as N410/$1 during intra-day trading,
• Meanwhile, forex turnover at the official window decreased slightly by 17.89% to $115.26 million on Friday, 4th March 2022.
• According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window decreased from $140.38 million recorded on Thursday, 3rd March 2022 to $115.26 million on Friday.
• A sum of $548.71 million was traded at the official window in the week, compared to the $571.08=9 million that exchanged hands in the previous week.

Crypto market

The crypto market nosedived on Friday, bowing to bearish sentiments as the industry shed $139.82 billion in a single day’s trade. This is after the crypto market capitalization declined by 7.62% to stand at $1.697 trillion as of 23:34pm WAT on Friday.

The bearish movement in the market was partly due to the 8.75% decline in the price of bitcoin to trade at $38,775.29, while the second most capitalized crypto-asset dipped by 8.56% to trade at $2,591.97. In the same vein, Solana recorded a downturn of 8.3% to trade at $87.665.

Similarly, Terra dipped by 6.36% on Friday to trade at $84.7569 while Uniswap recorded a price decline of 8.8% to trade at $8.72.

Meanwhile, Ukrainian Vice Prime Minister Mykhailo Fedorov has announced in a tweet that the country has decided to cancel the airdrop for crypto donors and plans to raise more money through the sale of non-fungible tokens (NFTs) instead

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