Currencies
Naira falls at black market despite over 100% improvement in dollar supply
At the black market where forex traded unofficially, the exchange rate depreciated to close at N472/$1.
On January 8, 2020, the exchange rate between the naira and dollar closed at N393.50/$1, the fifth trading day of 2021 at the Investors and Exporters’ (NAFEX) window where forex is traded officially.
This is an appreciation from the N393.67 recorded on the previous trading day, January 7, 2021.
READ: Global Economy to grow by 4% in 2021 – World Bank
Nairametrics understands that the over 100% improvement in dollar supply is occurring at the same time there was a price increase on Friday, sustaining the previous trading day’s increase.
We also reported last week that the latest round of adjustment at the I&E window is temporary as the rates could fall back below N400/$1.
However, at the black market where forex traded unofficially, the exchange rate depreciated to close at N472/$1 on Friday, January 8, 2021, breaking the almost 2 weeks period of stability. This represents a N2 drop when compared to N470/$1 it closed at the previous trading day January 7, 2021. It has been trading at N470/$1 since the 29th of December 2020.
The exchange rate disparity between the parallel market and the official market widened again to N78.50, representing a 16.7% devaluation differential.
READ: Naira devalues to N410.25/$1 at the official NAFEX Window
NAFEX
The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N393.50/$1 as against N393.67 reported on January 7, 2021.
- This represents a 17 kobo gain when compared with that of the previous trading day.
- The opening indicative rate was N393.49 to a dollar on Friday. This represents a 20 kobo gain when compared to the N393.69 that was recorded on Thursday, January 7, 2021.
- The N413.85 to a dollar was the highest rate during intra-day trading before, it still closed at N393.50 to a dollar. It also sold for as low as N380/$1 during intra-day trading.
- Forex turnover: Forex turnover at the Investor and Exporters (I&E) window increased by 102.5% on Friday, January 8, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover rose from $32.41 million on Thursday, January 7, 2021, to $65.63 million on Friday, January 8, 2021.
- The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
- The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
READ: List of Cryptos outperforming Bitcoin, with weekly gains of over 100%
Can the naira sustain below N400?
On Thursday, December 31, 2020, the central bank allowed the exchange rate to depreciate to N410.25 as a late demand surge forced prices higher.
Even though the highest price for the day was N413.85, the market still closed lower at N393.50 as the trend from the previous trading day continued, blowing any initial belief that a devaluation had occurred last week.
READ: Gold fast losing the battle to Bitcoin
Devaluation supporters who had expected this to be a nudge towards “market reality” will be surprised by the appreciation recorded on Monday, suggesting that the central bank will continue with the defence of the local currency in the new year. On the flip side, policy supporters will cite this as the effect of market forces.
Currencies
Naira appreciates at NAFEX as Nigeria’s external reserve is set to get a boost
Naira gained against the US Dollar at the NAFEX window on Friday to close at N409/$1.
Friday, 9th April 2021: The exchange rate between Naira and the US Dollar closed at N409/1$ in the Importers and Exporters window, where forex is traded officially.
Naira gained against the US Dollar at the NAFEX window on Friday to close at N409/$1. This represents a 0.16% gain when compared to N409.65/$1 recorded on Thursday, as the country’s external reserve is set to receive a boost with the planned issuance of $500 million Eurobonds.
Meanwhile, the naira maintained stability at the parallel market on Friday, 9th April, 2021 to close at N485 to a dollar, the same rate as maintained since last week.
READ: Nigeria’s external reserve drop by $261 million in 15 days, oil firms to sell forex to CBN
Trading at the official NAFEX window
Naira appreciated against the US Dollar at the Investors and Exporters window on Friday to close at N409 to a dollar. This represents a 65 kobo gain when compared to N409.65/$1 recorded on Thursday, 8th April 2021.
- The opening indicative rate closed at N409.79 to a dollar on Friday. This represents a 71 kobo gain when compared to N410.50/$1 recorded on Thursday.
- Also, an exchange rate of N420 to a dollar was the highest rate recorded during intra-day trading before it closed at N409/$1. It also sold for as low as N395/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window dropped by 41.1% on Friday, 9th April 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined from $93.69 million recorded on Thursday, April 8, 2021, to $55.21 million on Friday, April 9, 2021.
READ: Naira gains at NAFEX as oil prices record biggest single day loss in 11 months
Cryptocurrency watch
The world’s most popular digital currency, bitcoin recorded a 3.05% increase in value on Saturday evening, 10th April 2021.
- Bitcoin went up by 3.05% to trade at $59,907 on Saturday evening, compared to $58,135 recorded at the close of trade on Friday.
- This is coming after it had risen to $61,222.22 on Saturday, its highest in nearly a month, propelled by talks of constrained new supplies against evidence of wider adoption.
- Bitcoin (BTC) is up 116% from the year’s low of $27,734 on January 4. It crossed the $60,000 mark for the first time on March 13, hitting a record $61,781.83 on Bitstamp exchange, just after U.S. President Joe Biden signed his $1.9 trillion fiscal stimulus package into law.
- The digital currency has been widely adopted by many, replacing gold as the global digital-reserve asset.
READ: Nigeria’s external reserve drop by $261 million in 15 days, oil firms to sell forex to CBN
Oil price gain
Brent crude oil price declined on Sunday evening as it closed at $63.02 per barrel, indicating a 0.28% drop compared to $63.2 recorded at the close of trade on Friday.
- This is as the fall in oil prices especially towards the end of last week can be attributed to demand concerns and Covid-19 lockdowns in some major economies, due to a spike in infections.
- The Russian government has said that the coronavirus pandemic could continue to impact on global oil demand until 2024.
- Crude oil prices had recorded a marginal increase during the week despite the decision of the OPEC+ to ease production cuts in the coming months. However, US Shale Giant has commended the OPEC+ group for bringing supply and demand back to balance.
- Brent Crude closed at $63.02 (+0.11%), WTI Crude closed at $59.39 indicating 0.12% gain, Bonny Light, $61.55 (+0.46%), OPEC Basket (+0.89%) to close at $61.22 while Natural gas gained 0.67% to close at $2.543.
External reserve
Nigeria’s external reserve gained $29 million on Thursday, 8th April 2021 to close at $35.006 billion, being the highest external reserve position recorded in over a month.
- This indicates a 0.08% increase when compared to $34.977 billion recorded on Wednesday, 7th April 2021.
- It also represents an increase in the country’s external reserve position for the 13th consecutive day, having endured a significant downturn earlier in the year. Nigeria’s reserve has added a total of about $590 million in 13 days.
- This recent increase in Nigeria’s external reserve could however be attributed to the increase in crude oil prices recorded earlier in March before the recent bearish trade in the crude market.
- It could be attributed to the possible increase in diaspora remittance as the CBN offers incentives for every unit of a dollar received in Nigeria from diaspora remittance.
- The external reserve is likely to get further boost as the Federal Government recently announced plans to issue $500 million Eurobonds for 2021.
Currencies
Exchange rate strengthens at NAFEX as dollar supply spikes by 690%
Naira gained against the US Dollar on Thursday to close at N409.65/$1 while dollar supply surges by 690.6%.
Thursday, 8th April 2021: The exchange rate between Naira and the US Dollar closed at N409.65/1$ in the Importers and Exporters window, where forex is traded officially.
Naira gained against the US Dollar on Thursday to close at N409.65/$1. This represents a 0.33% appreciation compared to N411/$1 recorded on Wednesday.
Meanwhile, naira remained stable in the parallel market on Thursday, 8th April 2021 to close at N485 to a dollar, the same rate as maintained since last week.
READ: Naira falls at NAFEX window despite 394% increase in dollar supply
Trading at the official NAFEX window
Naira appreciated against the US Dollar at the Investors and Exporters window on Thursday to close at N409.65 to a dollar. This represents a N1.35k gain when compared to N4111/$1 recorded on Wednesday, 7th April 2021.
- The opening indicative rate closed at N410.5 to a dollar on Thursday. This represents a N0.76 depreciation when compared to N409.74/$1 recorded on Wednesday.
- Also, an exchange rate of N419 to a dollar was the highest rate recorded during intra-day trading before it closed at N409.65/$1. It also sold for as low as N394/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window increased by 690.6% on Thursday, 8th April 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover grew from $11.85 million recorded on Wednesday, April 7, 2021, to $93.69 million on Thursday, April 8, 2021.
Cryptocurrency watch
The world’s most popular digital currency, bitcoin recorded a 0.18% decline in value in the early hours of Friday, 9th April 2021.
- Bitcoin was down by 0.18% to trade at $58,135 on Friday morning, bur lead compared to $36,199 recorded at the close of trade on Wednesday.
- Meanwhile, according to a research report, bitcoin is expected to surge around 600$ to hit the $400,000 level in 2021. This has been well met as major financial institutions in the world such as Visa, Goldman Sachs, and Morgan Stanley have embraced the digitalization of money.
- The digital currency has been widely adopted by many, replacing gold as the global digital-reserver asset.
READ: Naira remains flat as external reserve fall to just 6 months of imports
Oil price gain
Brent crude oil price recorded a marginal increase on Thursday as it closed at $63.2 per barrel, indicating a 0.06% gain compared to $63.16 recorded at the close of trade on Wednesday.
- Crude oil prices are beginning to record tepid growth demands are expected to increase due to revived optimism in the market as the United Kingdom has given the first vaccine to about half of its population, while the US has vaccinated about 30% of its population.
- Crude oil prices have recorded a marginal increase during the week despite the resolve of the OPEC+ to reduce production cuts in the coming months. However, US Shale Giant have commended the OPEC+ group in bringing supply and demand back to balance.
- Brent Crude closed at $63.2 (+0.06%), WTI Crude closed at $59.75 indicating 0.25% gain, Bonny Light, $60.6 (-2.63%), OPEC Basket (-1.06%) to close at $60.68 while Natural gas dipped by 0.12% to close at $2.519.
External reserve
Nigeria’s external reserve gained $1.79 million on Thursday, 8th April 2021 to close at $34.977 billion, being the highest external reserve position recorded in over a month.
- This indicates a 0.01% increase when compared to $34.975 billion recorded on Thursday 1st April 2021.
- This also represents an increase in the country’s external reserve position for the 12th consecutive day, having endured a significant downturn in the early parts of the year. Nigeria’s reserve has added a total of $560.5 million in 12 days.
- This recent increase in Nigeria’s external reserve could however be attributed to the increase in crude oil prices recorded earlier in March before the recent bearish trade in the crude market.
- It could be attributed to the possible increase in diaspora remittance as the CBN offers incentives for every unit of dollar received in Nigeria from diaspora remittance.
