Wednesday, 3rd November 2021: The exchange rate between the naira and the US dollar closed at N414.8/$1, at the official Investors and Exporters window. Naira appreciated against the US dollar to close at N414.8/$1 on Wednesday 3rd November 2021, representing a 0.07% gain compared to N415.07/$1 recorded at the close of trading activities on Tuesday.

On the other hand, naira remained flat against the US dollar at the parallel market on Wednesday to close at N570/$1, the same as recorded as of the close of trading activities on Tuesday, 2nd November 2021. This is according to information obtained by Nairametrics from BDC operators in Lagos.

Nigeria’s foreign reserve continued on a decline on Tuesday with a 0.04% drop to close at $41.78 billion on 2nd November 2021. This represents a $15.54 million decline compared to $41.79 billion recorded as of Monday, 1st November 2021.

Trading at the official NAFEX window

The exchange rate gained against the US dollar on Wednesday, 3rd November 2021, to close at N414.8/$1 compared to N415.07/$ recorded in the previous trading session. This represents a 0.07% appreciation in the exchange rate.

The opening indicative rate closed at N413.76/$1 on Wednesday. This represents a 50 kobo appreciation compared to N414.16/$1 recorded in the previous trading day.

An exchange rate of N444 to a dollar was the highest rate recorded during intra-day trading before it settled at N414.8/$1, while it sold for as low as N404/$1 during intra-day trading. The highest rate recorded during the day has been the same in the past seven trading sessions.

Forex turnover at the official window increased significantly by 113.1% to $133.37 million.

According to data tracked by Nairametrics from FMDQ, forex turnover at the I&E window increased from $62.58 million recorded on Tuesday to $133.37 million on Wednesday, 3rd November 2021.

Cryptocurrency watch

The cryptocurrency market also started bearish on Thursday despite the positive rally recorded on Tuesday. The total crypto market cap currently stands at $2.733 trillion, representing a 0.41% decline compared to the previous day.

In the same vein, Bitcoin dipped marginally by 0.44% to trade at $62,654.29, while Ethereum also dipped 0.75% to trade at $4,572.26. Meanwhile, November has been known for trading bullish since 2013, with the exception of 2018 and 2019. The market has already gained over 3% in November having already recorded a 39.92% surge in the previous month.

The bullish run came amid numerous positive developments in the industry. Those included a reassurance from Fed Chair Jerome Powell and SEC Chief Gary Gensler that the US has no intentions to ban BTC and the subsequent launch of two Bitcoin Futures ETFs in the country.

Meanwhile, Goldman Sachs has reportedly explained in a research note circulated by the bank’s managing director of Global Markets, Bernhard Rzymelka, that the price of Ether (ETH) could hit $8,000 by year-end. The note details that, cryptocurrencies have traded in line with inflation breakevens since 2019, according to Zerohedge.

Crude oil price

The crude oil market has retreated significantly on signs of dropping demand, as Brent Crude dipped over 4% to close at $81.21 per barrel on Wednesday. The bearish performance of the market was attributed to slow demand and rising inventories.

According to a report, Hedge funds are beginning to reduce their buying spree, which has resulted in a negative turnout in the global crude oil market. In the same vein, West Texas Intermediate slid by 3.63% to close at $80.86 per barrel, while natural gas gained 2.31% to close at $5.67 on Wednesday.

However, the Chief Financial Officer of BP Plc, Murray Auchincloss during a conference call on Tuesday said that demand will continue to increase and reach pre-pandemic levels at some point in 2022. According to him, “OPEC+ is doing a good job managing the balance, so we remain constructive on oil prices.”

External reserve

Nigeria’s foreign reserve declined for the third time in a row, having recorded continuous positive growth in the past two months. The reserve level dipped marginally by 0.04% to close at $41.78 billion as of 2nd November 2021, compared to $41.79 recorded the previous day.

Meanwhile, the nation’s foreign reserve gained $5.04 billion in the month of October, on the back of the $4 billion raised by the federal government from the issuance of Eurobond in the international debt market. The gains recorded in the previous month is higher than the $2.76 billion gain recorded in the month of September 2021, while the recent decrease puts the year-to-date gain at $6.42 billion.

So far in the month of November, Nigeria’s reserve has lost $53.7 million. While the reason for the recent decline still remains unclear, oil prices continue to trade above $80 per barrel at the global crude oil market.