Tuesday, July 19, 2022: The Nigerian Investors and Exporters (I&E) FX Window closed yesterday’s trading session on a bullish note with the Nigerian currency gaining N2 against the dollar to close at N424.17/$1 at the official market. Representing a 0.5 percent uptick from the opening rate of N426.20/$1 on Tuesday morning, and a 1.2 percent appreciation from the N429.12/$1 rate recorded as of the close of trading activities the previous day.
An exchange rate of N444/$1 remained the highest rate recorded during the intra-day trading before it settled at N424.17/$1 at the end of the trading session, while it also traded as low at N410/$1 during intra-day trading. According to data from FMDQ, a total of $383.59 million was traded at the Investors and Exporters (I&E) Window for the reporting period. This represents an increase of 301 percent from the $95.58 million traded on Thursday. This means that liquidity in the market increased as more transactions were fulfilled in the official market.
In the parallel market, Naira closed against the dollar at N61/$1, declining by 0.16 percent compared to N615/$1 traded on the previous day. Trading activities at the B2B market show that the exchange rate closed at about N619/$1 for the same period being reported. This is based on the information obtained from BDC operators in Lagos.
The CBN has been able to keep the gross external reserve at the $39 billion corridor since June 2022. Also, the gross external reserve has been crawling upward since July 2022, and data from the Central Bank, as of July 15, puts Nigeria’s foreign reserve at $39.44 billion, suggesting a slight improvement by $10.9 million (0.03 percent) from the 39.43 billion recorded as of July 14, 2022
As oil crude price races back above $100 in the market, the external reserves are expected to increase on the back of the commodity. Also, the CBN’s market intervention cushioning the supply shock of the greenback and helping to stabilize the naira.
Capital Market Update
As of July 19, 2022, the Nigerian equities market closed the trading session in red as the NGX All Share Index (ASI) declined slightly by 2 basis points (bps) to close at 52308.88.
Mixed performance was observed for the sectors under our review as the NGX indices for three sectors increased, while the two remaining indices declined. Insurance, Oil and Gas, and Pension performances were bullish as the three indices closed in green while Consumer Goods and Banking indices closed in red. The Insurance index, leading the gainers rose by 86bps, Oil and gas by 79bps, and Pension by 12bps. On the other hand, the Consumer Goods index dropped by 13bps, while Banking, having the highest decline, dipped by 41 bps.