Demand Pressure Continues Even As Exchange Rate Weakens Across FX Markets

On March 4, 2022, the exchange rate between the naira and the US dollar closed at N416.67 to $1 at the official Investors and Exporters (I&E) window.

READ ALSO: Bitcoin Loses Falls Sharply As Investors Run To Strong Dollar

With the exchange rate at N416.67 to $1, there is a depreciation of 0.04% compared to N416.5 to $1 recorded in the previous trading session. The Forex turnover at the official market however declined by 17.89% to $115.26 million.

Also, the exchange rate at the parallel market depreciated by 0.35% to close at N580 to $1 from N578 to $1 that was recorded on Thursday, March 3, 2022.

The exchange rate at the Peer-to-Peer (P2P) forex market depreciated by 0.77% to trade at a minimum of N578.4 to $1 in the early hours on Friday, March 4, 2022 compared to N574 to $1 which was recorded on Thursday morning.

The depreciation of the Naira against the US dollar is attributed to increased demand for FX in the non-official markets, while the marginal downturn at the I&E window is the usual managed movement, floating between N415 to $1 and N416.67 to $1.

The exchange rate at the Investors and Exporters window closed at N416.67 to $1 on March 4, 2022. The opening indicative rate closed at N415.7 to $1 on Friday, March 4, 2022 representing a 27 kobo appreciation compared to N415.97 to $1 on Thursday, March 3, 2022.

N444 to $1 exchange rate was the highest rate recorded during intra-day trading before it settled at N416.67 to $1 while it sold for as low as N410 to $1 during intra-day trading.

Even with all these, the forex turnover at the official window decreased slightly by 17.89% to $115.26 million on Friday, March 4, 2022.

Also, data from FMDQ indicates that forex turnover at the I&E window decreased from $140.38 million recorded on Thursday, March 3, 2022 to $115.26 million on Friday, March 4, 2022.

A total of $548.71 million was traded at the official window in the week compared to the $571.08 million that was traded in the previous week.

Crypto Market

The crypto market fell sharply on Friday, March 4, 2022 bowing to bearish sentiments as the industry shed $139.82 billion in a trade for a single day. This was after the crypto market capitalization declined by 7.62% to stand at $1.697 trillion as of 23:34pm WAT on Friday.

The bearish movement in the market was partly due to the 8.75% decline in the price of Bitcoin to trade at $38,775.29 while the second most capitalized crypto asset dipped by 8.56% to trade at $2,591.97.

Also, Solana recorded a downturn of 8.3% to trade at $87.665, Terra dipped by 6.36% to trade at $84.7569 while Uniswap recorded a price decline of 8.8% to trade at $8.72.

In a tweet announced by the Ukrainian vice Prime Minister Mykhailo Fedorov, he said that the country has decided to cancel the airdrop for crypto donors and plans to raise more money through the sale of non-fungible tokens (NFTs) instead.