Friday, July 29, 2022: The Nigerian Investors and Exporters (I&E) FX Window closed the trading session on a bearish note as the naira dropped in value against the dollar to exchange at N429/$ representing a 0.2 percent depreciation from the opening rate 0f N428.10/$ at the beginning of trading activities on Friday. On a day-on-day basis, the naira also depreciated by 0.7 percent having fallen from N426.20/$ recorded as of the end of the previous trading session.
An exchange rate of N444/$ remained the highest rate recorded during the intra-day trading before it settled at N429/$ at the end of the trading session, while it also traded as low as 406/$ during intra-day trading. According to data from FMDQ, a total of $59.59 million was traded at the Investors and Exporters (I&E) Window for the reporting period. Representing a decrease of 54 percent from the $129.13 million traded on Friday of the previous week.
In the parallel market, after falling consecutively over the last week, the naira gained against the dollar to close at about N695/$. However, it lost about 7 percent of its value on a week-on-week basis. Trading activities at the B2B market show that the exchange rate closed at about N710/$ for the same period being reported. This is based on the information obtained from BDC operators in Lagos.
According to data from the Central Bank of Nigeria (CBN), the gross foreign reserve which has been crawling upward since June 2022 took a downturn to stand at $39.22 billion as of July 28, 2022. Representing a $28.6 million (0.07 percent) decline from $39.25 billion recorded on 27 July 2022.
The steady decline in the value of the naira emphasizes the need for the government to increase the foreign exchange earnings, particularly from non-oil sources, to support the demand for the greenback in the forex market and to reduce the pressure on the naira.
Capital Market Update
As of July 29, 2022, the Nigerian equities market closed the trading session on a bullish note as the NGX All Share Index (ASI) rose by 142 basis points (bps) to close at 50370.25. The trading volume was 354,772,588 units, increasing by 308,677,928 units from 46,094,660 units traded the previous day. The total value that exchanged hands was N2,811,462,598.97 representing a 260 percent increase from the value (788,070,924.38) traded the previous day.
The performance of all the sectors under our review was positive as the NGX indices for all the sectors rose. Banking, Pension, Insurance, Consumer Goods, and Oil and Gas indices were bullish, having closed in green. The Banking index rose by 660 basis points (bps), pension by 307 bps, insurance by 91 bps, consumer goods by 20 bps, and oil and gas, having the least increase rose by just 6 bps.