Monday, October 17, 2022: The exchange rate between the naira and dollar closed the trading session on a bullish note with the naira setting at N437.03/$1 at the Investors and Exporters window. This represents a gain of 0.03 percent against the dollar. Although the naira opened trading with the naira appreciating by 0.4 percent, as the intra-day trading progressed, it dropped to the closing price of N441.25. On a week-on-week basis, the naira weakened by 0.02 percent to the dollar.
An exchange rate of N442.50/$1 was the highest rate recorded during the intra-day trading before it settled at N441.25/1$ at the end of the trading session, while it also traded as low as N425/$ during intra-day trading. According to data from FMDQ, forex liquidity declined 33 percent from $69.18M to a total of $46.21M. However, despite the decline, the value of the naira appreciated slightly.
Parallel Market
October 17, 2022: At the parallel market, the naira has been weakening. It declined to N742/1$ as of the end of trading activities for the reporting period. Similarly, trading activities at the B2B market show that the naira depreciated, closing at about N745/1$ for the same period being reported. This is based on the information obtained from BDC operators in Lagos.
Trading Activities at the Official Window
The exchange rate at the official market closed at N441.25/$1 on Monday, 17th October 2022. The opening rate was N439.63/$1 while the closing rate on Friday, 14th October 2022 was N441.38/$1.
Additionally, there was a $22.97 million decrease in forex liquidity in the official Investors and Exporters window on Wednesday, which represents a 33 percent decrease from the $69.18 million that exchanged hands during the last trading session.
Foreign Reserves
According to data from the CBN, as of October 13, 2022, the gross external reserve of Nigeria decreased to $37.91 billion. Declined by $125 million (0.11 percent) from the 37.95 billion recorded as of October 12. Nigeria’s gross external reserve has been declining since the beginning of October and has been hovering around N38 billion dollars for several months.
Meanwhile, there has been a massive erosion of the value of the naira this year. The new NBS inflation report shows that inflation in September 2022 rose to 20.77 percent. This raises the expectation of an interest rate hike by the CBN given its resort to Monetary Policy Tools in stabilizing price levels and defending the naira.
