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Exchange rate gains at official market as foreign reserve continues with uptrend

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Tuesday, 12th April 2022: The exchange rate between the naira and the US dollar closed at N416.62/$1 at the official Investors and Exporters (I&E) window.

Naira appreciated by 0.09% to close at N416.62/$1 on Tuesday, 12th April 2022 compared to N417/$1 recorded on Monday. Forex turnover also increased by 13.51% to $144.29 million on Tuesday, representing the highest daily supply in the past four trading sessions.

On the other hand, the exchange rate at the peer-to-peer market appreciated massively to N580/$1, representing a 1.19% appreciation compared to N587/$1 recorded in the previous trading session.

The exchange rate at the parallel market closed flat at N587/$1, the same as recorded in the previous trading session. This is according to information obtained from BDCs operating in Nigeria.

Meanwhile, Nigeria’s foreign reserve improved by 0.11% to stand at $39.7 billion compared to $39.66 billion recorded as of the previous day. Meanwhile, the Central Bank has continued to intervene in the official forex market from the external reserve in order to maintain the stability of the local currency.

Trading at the official NAFEX window

The exchange rate at the Investors and Exporters window closed at N416.62/$1 on Tuesday, 12th April 2022, representing a 0.09% appreciation compared to N417/$1 recorded in the previous trading session.

  • The opening indicative rate closed at N416.17/$1 on Tuesday, 12th April 2022, depreciating marginally by 0.02 kobo compared to N416.15 recorded on Monday.
  • An exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N416.62/$1, while it sold for as low as N410/$1 during intra-day trading.
  • A total of $144.29 million was traded in FX at the official Investors and Exporters window on Tuesday.
  • According to the data from the FMDQ, forex turnover increased by 13.51% from $127.12 million recorded on Monday to $144.29 million on Tuesday, 12th April 2022.

Crypto market update

  • The crypto market traded bullish on Tuesday, with the market capitalization gaining 1.54% to close at $1.826 trillion, following a 1.01% rally in the price of bitcoin, which closed at $39,923.06.
  • In the same vein, the second most capitalized crypto asset, Ethereum also gained 1.32% to close at $3,018.92.
  • Solana gained 2.67% on Tuesday to close at $102.325, Terra gained 2.04% to close at $84.1812018, while Uniswap recorded a 3.23% gain to close at $9.27.
  • Meanwhile, a recent report on cryptocurrency and blockchain adoption in Nigeria by Kucoin, a global cryptocurrency exchange shows that Nigerians are embracing cryptocurrencies by virtue of having limited access to affordable financial services. Cryptocurrencies are thus becoming an alternative solution for the storage and transfer of assets.
  • The report also shows that 33.4 million Nigerians, which accounts for 35% of the population aged 18 to 60, currently own cryptocurrencies or have traded cryptocurrencies over the past 6 months.

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Why cost of economy flight ticket may hit N100,000 soon

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The cost of flying economy class across domestic airlines in Nigeria is expected to hit N100,000 soon.

This is due to the rising operational costs occasioned by aviation fuel price hikes, foreign exchange shortages, among others.

This was disclosed by the Airline Operators of Nigeria (AON), through the Chairman, United Airlines, Professor Obiora Okonkwo on Wednesday.

What domestic operators are saying

Okonkwo said, “Obviously, it is inevitable. I can tell you that all the airline operators, in the last three months, have been losing money, a huge amount of money. There is too much stress on the operational fronts for them to break even.

“Even if the aviation fuel is made available, there must be a review to reflect the minimal operational cost. We are offering patriotic services to the nation and understand the essential part of it. We are part of this economic development process in Nigeria but it is coming at a very huge sacrifice.

“Nothing less than N100,000, between N100,000 and N120,000 base price, even with Jet A1 fuel at N400 – N500. That is what it is. In the industry, it is expected that you will gain some here and lose some here but the biggest challenge indigenous operators are having is that the cost of everything is high. You source money from the commercial bank rates. You source money from the black market. No moratorium for your loans and the banks and AMCON are quick to jump on you.”

The Chief Operating Officer, Ibom Air, Mr. George Uriesi, also explained that the local airlines had reached a point in their operational cost to take a drastic measures.

He said, “Something has to give in. It’s either the prices of fuel that come down or the prices of airfares go up from where they are. So far, the airlines have tried very much to work within the airfares as they are. All sides of the divide are aware that the airlines have done the best that they can do.

“I don’t know what tomorrow holds but at some point, if the airline doesn’t survive, it goes down, to the detriment of everybody-the people who work for the airline, the people who fly on the airline, the country’s economy, everything goes down. So, airlines are just trying to be stable and patriotic. That’s where we are.”

What you should know

  • Oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN) have identified solutions to the high price and scarcity of Jet A1 fuel popularly known as aviation fuel, across the country, according to Naijaonpoint.
  • The major marketers have said that the situation can abate if marketers are able to get foreign exchange at decent rates instead of sourcing from the parallel market.
  • This was made known by the Executive Secretary of MOMAN, Clement Isong, during an interview on Wednesday in Lagos.
  • Isong noted that a drop in the global oil prices and the adjustment of the international supply of crude to meet demand will help the prices come down to more acceptable levels.

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Crypto Exchange Coinbase Slows Hiring Amid Market Downturn

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Leading U.S. crypto exchange Coinbase is slowing hiring, citing the current down cycle in the market as a reason to rethink its staffing strategy. The company’s management believes the move will allow the trading platform to match its hiring needs with its business goals.

Cryptocurrency exchange Coinbase has announced a change in its staffing plans. After previously aiming to triple its size heading into this year, the company now feels it’s prudent to slow hiring and reassess its personnel needs against its business goals, given the current market conditions. Quoted in a press release on Tuesday, Coinbase President and Chief Operating Officer Emilie Choi explained:

Choi further elaborated that Coinbase had made the decision in order to emerge stronger from this down cycle. She emphasized the step is part of managing the business to the scenarios the company had planned for, and assured the changes will not affect its expense outlook for the second quarter and the whole of 2022.

The digital asset exchange now intends to focus on integrating its recent hires and becoming more rigorous in determining its priorities. “We know this is a confusing time and that market downturns can feel scary,” the top executive noted while pointing out that the company has been through other, similar challenges in the past.

Choi’s announcement comes after Coinbase revealed in its earnings report earlier in May that it holds $256 billion in fiat and crypto assets on behalf of its customers. It also admitted that if the company declared bankruptcy, its users can potentially lose access to the crypto funds in their accounts as these could be subject to bankruptcy proceedings.

Do you expect other major crypto companies to reconsider their hiring plans? Tell us in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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