Mr. Bismarck Rewane, the Managing Director and Chief Executive Officer, Financial Derivatives based in Lagos, has said the Naira to United States Dollar exchange rate may drop to as low as N475 in November and December if the crude oil price remains between $40 and $42 per barrel.
The economic expert disclosed this during a presentation at the Lagos Business School Breakfast Session last week.
The Naira presently exchanges around N463 to N465 against the United States Dollar on the black market.
According to Rewane, the low oil price below $41 per barrel will limit foreign exchange inflow while the resumption of international flights, trading and manufacturing activities would increase forex demand.
Rewane said, “Naira [is] likely to depreciate to trade around 470-475 in November/December. Convergence of multiple rates will continue but unification is unlikely.
“The CBN will maintain its forex rationing stance and intensify efforts to keep the naira stable. External reserves to likely fall towards $34bn in the coming months.”
He explained that the International Monetary Fund’s Article IB review had started, this he said would increase the Central Bank of Nigeria pressure.
“As Nigeria ponders IMF’s conditionalities, CBN could succumb to pressure and devalue the naira to N390-400/$,” he added.
Naira Gains 1.58 Percent to N416 at Official FX Market, Bitcoin, Other Cryptocurrencies Plunge
The Nigerian Naira gained 1.58 percent or N7.56 against the United States Dollar at the official forex market on Wednesday.
The local currency opened the day at N423.56 to a US Dollar before improving in value to N416 against the greenback. At the official forex window managed by the FMDQ Group, investors traded $114.95 million on Wednesday.
The improvement in Naira value was after the market had digested the Central Bank of Nigeria’s currency adjustment. The central bank had adjusted the Naira to Dollar exchange rate by N2 from N411 to N413 on Friday, leading to devaluation outcry across Africa’s largest economy.
On Friday, the Naira plunged to as low as N435 against the United States Dollar at the official forex trading market and N575 at the unregulated parallel market, popularly known as the black market, before moderating to N416.
Meanwhile, bitcoin and other cryptocurrencies plunged across the board. Bitcoin depreciated by 7.16 percent to $43,058 per coin in the last 24 hours. The decline does not stop there as the second most capitalised digital asset, Eth dipped by 9.77 percent to $3,441.
Solana, Ripple (XRP), Luna and Cardano (ADA) lost 11.48 percent, 8.13 percent, 9.5 percent and 8.6 percent, respectively.
The decline was after the US Federal Reserve minutes of December 14 – 15 meeting released on Wednesday revealed that policymakers are planning to raise interest rates as early as March 2022 to curb escalating inflation rate. Generally, hawkish monetary policy is negative for cryptocurrency as it drags on capital inflow into the space and encourages investors to look into more stable assets for higher interest rates.
According to The Wall Street Journal, the “Federal Reserve officials at their meeting last month eyed a faster timetable for raising interest rates this year, potentially as soon as in March, amid greater discomfort with high inflation.
“Minutes of their Dec. 14-15 meeting, released Wednesday, showed officials believed that rising inflation and a very tight labor market could call for lifting short-term rates “sooner or at a faster pace than participants had earlier anticipated.”
Naira Opens 2022 at N426.25 Against the United States Dollar at Official Forex Window
The Nigerian Naira opened the new year at N426.25 against the United States Dollar on Tuesday, January 4, 2022, at the official foreign exchange window managed by the FMDQGroup.
The local currency plunged to N435 against the US Dollar on Friday after the Central Bank of Nigeria (CBN) adjusted its Naira to Dollar exchange from N411 to N413.49. The adjustment is in line with Godwin Emefiele, governor of the CBN, statement that the country operated a managed-float exchange policy.
Naira pared losses against the US Dollar on Tuesday after forex traders, speculators and hoarders might have analysed CBN forex action and interpreted it as the usual adjustments.
At the unregulated parallel market known as the black market, the Naira plunged to N570 against the United States Dollar on January 4th, 2022. Despite the Central Bank of Nigeria (CBN) discouraging patronage at that section of forex, many Nigerians still relied on the black market for their forex needs.
However, the adjustment may not be unconnected to the change in Nigeria’s economic fundamentals. For instance, the nation’s foreign reserves used to back the Naira have been on a downward trend since hitting $41.8 billion on October 29, 2021. Presently, the reserves stood at $40.5 billion. This is despite oil prices trading at almost $80 a barrel, the highest in recent years.
But because of Nigeria’s inability to improve its production process, lower cost of production and generally increase crude oil output, it has failed to take advantage of the surge in oil prices. Therefore, the CBN adjusted Naira to Dollar exchange rate to reflect the nation’s economic reality of insufficient forex and also enable it meet demands.
Dollar to Naira Today December 23, 2021
Investors King will present the latest rate of the Dollar to Naira, both at the official market and the parallel market.
How much is the exchange rate of Dollar to Naira today?
Below is the performance of the Naira against the dollar, as recorded on Wednesday 22nd December 2021:
Dollar to Naira at the Black Market
On Wednesday, the black market saw the dollar being bought at a rate of N562 per dollar, and then sold at N565 per dollar.
Dollar to Naira at the Official Fx Window
The Dollar to Naira rate as at the close of business on Wednesday remained the same as the rate on Tuesday, settling at N415.10 per dollar, according to the Investors and Exporters window where the Naira is traded officially.
Wednesday’s opening saw the Dollar to Naira rate sit at N414.04 per dollar, but by Thursday the opening rate recognised a marginal rise to sit at N413.77 per dollar.
The Spot rate and Forward rate of the Dollar to Naira started to take shape again on Wednesday, returning to rates which for a long time were considered to be the usual for both rates.
The Spot rate traded at a very recognisable high of N404 per dollar, maintaining the low of N444 per dollar which it has seen for most, if not all of this week. The Forward rate has seen multiple fluctuations this week, unlike the Spot rate which has remained largely stable.
The Forward rate recorded a high of N411.35 per dollar, which is similar to a rate at which it sat consistently a few weeks back. It also recorded a highly familiar low of N453 per dollar, also from a few weeks ago.
The official daily turnover of the dollar on Wednesday sat at $215.29 million, more than $100m lower than the turnover recorded on Tuesday.
Heading into the festive period, this week has been one of consistency for the Dollar to Naira at the official fx window. The Naira maintained a similar range this week in all its openings and closing, not going beyond N413 – N415 per dollar.
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