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Currencies

Naira drops against the dollar at I&E forex window, as market liquidity declines

The naira was weakened on the first working day of the week as it depreciated to N387.33 to a dollar at the Investors and Exporters (I&E)

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Exchange rate depreciates at NAFEX window as forex liquidity drops further by 57%, Central Bank Continues intervention in Forex market to stabilize Naira, Naira to depreciate slightly over $1.52 billion maturing contracts expires, Naira hits N388.84 to $1 at the currency spot market, Investors and Exporters (I&E) window, Naira weakens against the dollar by 1.14% amidst uncertainty, Naira gains against the dollar at I&E window, forex liquidity up by 242%  

The naira was weakened on the first working day of the week as it depreciated to N387.33 to a dollar at the Investors and Exporters (I&E) window, after the day’s trading session. The local currency lost N0.83 against the dollar, when compared to the N386.50 to a dollar that is traded on Friday, June 8, 2020.

The exchange rate at the I&E window is different from the Central Bank of Nigeria’s published exchange rate, which currently stands at N360/$1. This is also different from the exchange rate at the parallel market, which was stable at N450 to a dollar, according to information on AbokiFX as of Monday, June 8, 2020.

READ ALSO: Naira: Analysts expect rate to hover around N440

Available information from the daily trading at FMDQ (where FX is traded by importers and investors) shows that the naira improved against the dollar by N0.13, closing at N387.33 to a dollar, as against the indicative rate of N387.46 to a dollar that it opened with on Monday morning. The opening indicative rate on Monday also represents a marginal gain of N0.29 when compared to the N387.75 that it opened with on Friday last week.

A cursory look at the data from the FMDQ shows that the turnover for the day dropped sharply by about 87% at $14.66 million. This is against the $112.89 million turnover that was recorded on Monday, June 8.

However, the local currency was stable at the parallel market, otherwise known as the black market as there was no movement. The naira exchanged for N450 to a dollar at the parallel market, which was the same rate it exchanged on Friday last week.

READ ALSO: Gold spot prices plunge as U.S releases impressive economic data

The depreciation of the naira at the I&E window may be attributed to a drop in dollar liquidity in the foreign exchange market despite improved foreign exchange earnings due to an increase in crude oil prices.

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Oil prices hit about $43 per barrel earlier today as sustenance of this increase will help stabilize the already fragile economy and ease the liquidity crisis in the forex market.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Currencies

Naira falls at NAFEX window as dollar supply drops significantly by 78%

Naira depreciated against the dollar to close at N410.67/$ on Monday, 10th May 2021, representing a 34 kobo drop from N410.33/$1 recorded on Friday, 7th May 2021.

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Monday, 10th May 2021: The exchange rate between the naira and the US dollar closed at N410.67/$1 at the Importers and Exporters window, where forex is traded officially.

Naira depreciated against the US dollar to close at N410.67 to a dollar on Monday, 10th May 2021, representing a 34 kobo drop when compared to N410.33/$1 that was recorded on Friday, 7th May 2021.

Meanwhile, the naira remained stable at the parallel market as it closed at N483/$1. This was the same rate that was recorded on Friday, May 7, 2021, as the dollar supply dropped significantly by 77.7%.

Trading at the official NAFEX window

The naira depreciated against the US dollar at the Investors and Exporters window on Monday to close at N410.67/$1, representing a 34 kobo drop when compared to the N410.33/$1 that was recorded on Friday.

  • The opening indicative rate closed at N410.22 to a dollar on Monday, 10th May 2021, representing a 12 kobo gain when compared to the N410.34/$1 recorded on Friday.
  • Also, an exchange rate of N422 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.67/$1. It, however, sold for as low as N400/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dropped significantly by 77.7% on Monday, 10th May 2021.
  • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined massively from $146.52 million recorded on Friday, 7th May 2021 to $32.61 million on Monday, 8th May 2021.

Cryptocurrency watch

Bitcoin, the world’s most popular cryptocurrency, slumped by 5.29% as of Monday evening to trade at $55,682.55.

  • The world’s largest cryptocurrency continues to trade much lower than April’s high of $65,000, which came in anticipation of Coinbase’s direct listing on Nasdaq.
  • While Bitcoin has remained relatively stable, the altcoin market has flourished with the likes of Ethereum more than doubling in 16 days.
  • Recently, American multinational investment bank Morgan Stanley began offering BTC custody to clients. Goldman Sachs also recently announced that clients would be able to invest in Bitcoin.
  • Ethereum, the world’s second-largest cryptocurrency, surges above $4,000 for the first time ever as it traded at $4,213.46 before slumping to $3,897.09.

Crude oil price stalls

OPEC’s crude oil production is estimated to have increased to a 3-month high of 24.96 million barrels per day (BPD) in April.

  • Brent Crude dropped by 0.31% on Monday evening to close at $66.1 compared to its closing price of the previous day’s trading session.
  • The WTI dropped by 0.29% on Sunday to close at $64.73, Bonny light crude dropped by 0.16% to close at $66.71, while the OPEC basket dropped by 2.39% to close at $68.20.
  • Oil prices recorded a weekly gain against the backdrop of optimism over a global economic recovery, despite the Covid-19 crisis in India which is biting hard.
  • In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activities.

External reserve

Nigeria’s external reserve plunged for the 14th consecutive day on Friday, 7th May 2021 as it dropped by about $18 million to close at $34.72 billion.

  • The nation’s foreign reserve declined from $34.74 billion recorded as of Thursday, 6th May 2021 to $34.72 billion on Friday, representing a 0.05% decline.
  • Nigeria’s foreign reserve has dipped $537.36 million since 16th April 2021 to date.
  • Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN extends its naira 4 dollar initiative.

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Currencies

Naira appreciates across forex markets as dollar supply improves by 38%

The naira appreciated at the parallel market to close at N483/$1 on Friday, representing a N2 gain compared to N485/$1 recorded on Thursday.

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on

FOREX, Dollar scarcity worsens as exchange rate falls to N472/$1 at black market , Naira falls to N460/$1 as CBN intervention fails to contain speculation

Friday, 7th May 2021: The exchange rate between the naira and the US dollar closed at N410.33/$1 at the Importers and Exporters window, where forex is traded officially.

Naira appreciated against the US dollar to close at N410.33 to a dollar on Friday, 7th May 2021, representing a 67 kobo gain when compared to N411/$1 that was recorded on Thursday, 6th May 2021.

Also, the naira appreciated at the parallel market as it closed at N483/$1, representing a N2 gain when compared to N485/$1 that was recorded on Thursday, May 6, 2021, as forex market liquidity improved by 38%.

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters window on Friday to close at N410.33/$1, representing a 67 kobo gain when compared to the N411/$1 that was recorded on Thursday.

  • The opening indicative rate closed at N410.34 to a dollar on Friday, 7th May 2021, representing a 2 kobo gain when compared to the N410.37/$1 recorded on Thursday.
  • Also, an exchange rate of N437.41 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.33/$1. It, however, sold for as low as N400/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window rose by 37.8% on Friday, 7th May 2021.
  • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $106.34 million recorded on Thursday, 6th May 2021 to $146.52 million on Friday, 7th May 2021.

Cryptocurrency watch

Bitcoin, the world’s most popular cryptocurrency, slumped by 1.52% as of Sunday evening to trade at $57,951.21.

  • An amount of 12,354 bitcoins was recently withdrawn from Coinbase totalling over $700 million. The massive outflow could be related to institutional investors.
  • Large financial institutions have started offering bitcoin custody services to their clients.
  • Recently, American multinational investment bank Morgan Stanley began offering BTC custody to clients. Goldman Sachs also recently announced that clients would be able to invest in bitcoin.
  • Ethereum recorded a growth of 1.43% to close at $3,923.43, reaching an all-time high.
  • Meanwhile, payments giant Visa and financial services provider TALA have partnered to boost cryptocurrency adoption in emerging markets.
  • This partnership is aimed at easing the process of converting, storing and using cryptocurrencies by underbanked consumers.

Crude oil price stalls

Crude oil prices moved towards $70 as the oil markets remain optimistic with strong bullish sentiments as summer approaches.

  • Brent Crude rose by 0.28% on Sunday evening to close at $68.28 compared to its closing price of the previous day’s trading session.
  • The WTI rose by 0.29% on Sunday to close at $64.90, Bonny light crude dropped by 0.43% to close at $66.82, while the OPEC basket rose by 2.29% to close at $68.20.
  • Oil prices recorded a weekly gain against the backdrop of optimism over a global economic recovery, despite the Covid-19 crisis in India which is biting hard.
  • In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.

External reserve

Nigeria’s external reserve plunged for the 13th consecutive day on Thursday, 6th May 2021 as it dropped by about $22 million to close at $34.74 billion.

  • The nation’s foreign reserve declined from $34.76 billion recorded as of Wednesday, 5th May 2021 to $34.74 billion on Thursday, representing a 0.63% decline.
  • Nigeria’s foreign reserve has dipped $519.36 million since 16th April 2021 to date.
  • Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN extends its naira 4 dollar initiative.

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