Naira crashes at the Black market as demand for FX surges

As of Tuesday, March 22nd, 2022 At the official Investors and Exporters (I&E) window, the naira and the US dollar exchange rate closed at N417/$1, the lowest level since January 4th, 2022.

On Tuesday, March 22nd, 2022, the exchange rate in the I&E window depreciated by 0.18 percent to settle at N417/$1, down from N416.25/$1 in the previous trading session.

In the previous five days, the parallel market currency rate has remained stable at N578/$1. However, as of Tuesday's closing of business, the Naira had fallen to N583/$1 on the illicit market, owing to rising demand.

In a similar vein, the Naira plummeted 0.7 percent on the peer-to-peer exchange rate market in the early hours of Wednesday morning, trading at a low of N584.1/$. In comparison, on Tuesday, March 22nd, 2022, the N580/$1 rate was observed.

Nigeria's foreign reserve fell 0.22 percent on Monday, March 21, 2022, to $39.58 billion, down from $39.67 billion the day before. The CBN's continual intervention in the official market is blamed for the drop.

Trading at the NAFEX official window

On Tuesday, March 22nd, 2022, the Investors and Exporters window exchange rate closed at N416.7/$1, a 0.18 percent depreciation from the previous trading session's rate of N416.25/$1.

On Tuesday, the opening indicative rate closed at N415.88/$1, an increase of 18 kobo over the N416.06/$1 recorded on Monday, March 21st, 2022.

The highest intra-day rate was N444/$1 before it closed at N417/$1, while it sold for as low as N410/$1 during intra-day trading. On Tuesday, a total of $78.71 million was exchanged in FX through the official Investors and Exporters window.

The cryptocurrency market

The crypto market is off to a bad start on Wednesday, with the industry's market capitalization falling 0.36 percent to $1.871 trillion as of press time.

The market's movement is mostly influenced by the success of bitcoin and Ethereum, the two most valuable crypto assets. In the early hours of Wednesday, the flagship cryptocurrency, bitcoin, fell 0.7 percent to $42,097.16.

In a similar vein, Ethereum lost 0.41 percent of its value to trade at $2,958.53, while Terra lost 0.33 percent of its value to sell at $92.76. On the contrary. Solana increased by 1.05 percent to $91.4375.

Meanwhile, Piyush Gupta, the CEO of DBS Bank, Southeast Asia's largest bank by assets, has indicated that cryptocurrencies might be a viable replacement for gold and its value. "I don't think cryptocurrencies will become money as we know it," he said at the recent Economic Times Global Business Summit, "but they can be an alternative to gold and its value."