Naira redesign: Anxiety as currency hoarders scamper for safe havens


Despite a sustained bullish trend at the crude oil market, Naira weakened significantly against the U.S. dollar at the official market on Thursday, extending its fall to the fourth straight day.

According to data published on the Central Bank of Nigeria’s website, the local currency closed at N416.16 to a dollar on Thursday, representing a N0.17 or 0.04 devaluation from N415.99 it exchanged in the previous session Wednesday.

Naira reached an intraday low of N415.66 and a high of N415.16 before closing at N416.16 at the close of trade on Thursday. By this development, the local currency has maintained a steady decline since the opening of business on Monday.

Available records show that the Naira closed at N415.64 to a dollar on Monday, N415.82 on Tuesday and N415.99 on Wednesday respectively.

Meanwhile, checks by Business Hallmark show that currency dealers at the Abuja parallell market (Black market) bought the hard currency at N565.00 per $1 on Thursday and sold at N570.00 per $1, the same rate it has been trading since the opening sales on January 24.

Also, at the Uyo parallel market, dealers bought the U.S dollar at N567.00 and sold at N570.00 per $1 on Thursday.

This is even as the crude oil market continued its bullish trend on Thursday, after Brent Crude maintained the $90 per barrel price, despite falling below during intra-day trading, following the tension between Russia and Ukraine, supply tightening, and inventory draw, which has ensured Brent crude maintain bullish run.

On Thursday, Brent Crude recorded a marginal 0.04% gain to close at $90 per barrel as of 12:00 am on Friday, while Natural gas gained massively by 46.48% to close at $6.265. On the other hand, West Texas Intermediate dipped 0.85% to close at $86.61 per barrel.

Meanwhile, the OPEC+ group is expected to decide next week whether it should continue unwinding the oil production cuts by another 400,000 barrels per day (bpd) in March. This is following the resilience of the market despite the growing concerns of the covid-19 in importing nations.

However, Nigeria’s external reserve dropped by 0.07% on Wednesday, 26th January 2022 to close at $40.18 billion, which represents a decline of $29.65 million from the $40.21 billion recorded as of the previous day.
The continuous decline in the country’s reserve level can be attributed to the Central Bank’s intervention in the official market in ensuring the stability of the exchange rate.

The nation’s foreign reserve gained $5.99 billion in the month of October, as a result of the $4 billion raised by the federal government from the issuance of Eurobond in the international debt market.

But in the month of November, the nation’s external reserve lost $611.01 million in value as against a gain of $5.99 million recorded in the previous month and a $2.76 million gain in September 2021. In December 2021, the reserve dipped by $66.17 million, while in January 2022 a total of $336.84 million has been lost in the reserve level.

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