Naira falls in black market as demand for Dollar increases

As at 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.

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 exchange rate had remained stable at N578/$1. However, as of Tuesday's closing of business, Naira had fallen to N583/$1 on the illicit market, owing to rising demand. According to data gathered from BDC operators interviewed by Nairametrics, this is the case.

Similarly, Naira fell 0.7 percent in the peer-to-peer exchange rate market, trading at a low of N584.1/$ in the early hours of Wednesday morning. This is in contrast to the N580/$1 exchange rate on Tuesday, March 22nd, 2022.

In terms of foreign reserves, Nigeria's FX reserves fell by 0.22 percent to $39.58 billion on Monday, March 21, 2022, compared to $39.67 billion the previous day. The decline is attributed to the CBN's ongoing intervention in the official market.

Trading at the NAFEX official window

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

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

The highest rate recorded during intra-day trading before it settled at N417/$1 was N444, while it sold for as low as N410/$1 during intra-day trading.

On Tuesday, a total of $78.71 million was traded in FX at the official Investors and Exporters window.

Update on 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 to gold and its value. He reported "I don't think cryptocurrencies will become money as we know it, but it can be an alternative to gold and its value.”" he said at the recent Economic Times Global Business Summit.