Wednesday 10th February 2021: The exchange rate between the Naira and the US Dollar closed N400/$1 at the NAFEX window where forex is traded officially.
Naira closed against the US Dollar at N400/$1, representing a 0.25% gain compared to N401/$1 recorded at the close of trade on Tuesday, 9th February 2021. This is the second straight day it is closing at N400/$1 or above.
The Naira also strengthened against the dollar in the black market to close at N478/$1 compared to N480/$1 recorded on Tuesday.
Meanwhile, Nigeria’s external reserve dipped by 0.11% as oil prices maintained its bullish trend.
The exchange rate between the naira and dollar at the Investors and Exporters (I&E) window closed at N400/$1 on Wednesday, 10th February 2021. This represents a marginal gain of N1 (0.25%) compared to N401 recorded on Tuesday.
The opening indicative rate was N401.04/$1 to a dollar on Wednesday, 0.66% depreciation compared to N398.42/$1 recorded the previous day
The dollar sold for as high as N405 to a dollar during intra-day trading before closing at N400 to a dollar. It also sold for as low as N386/$1 during intra-day trading.
Recall that last week the CBN adjusted its NDF exchange rate due February 23rd to N412.14 an early signal of where the apex bank thinks the exchange rate could land.
Forex turnover increased by 4% at the Investor and Exporters (I&E) window to stand at $50.74 million from $49.07 million recorded on Tuesday, 9th February 2021.
The price of bitcoin slumped during the day trading at $44,741.79 as of 6:00 pm on Wednesday, having enjoyed a recent run of positive performance.
Meanwhile, one bitcoin to naira exchange for N20, 072, 949on Wednesday 10th February 2020 compared to a day earlier when it traded for N20, 899, 988
Twitter also revealed it might consider using bitcoin as a treasury reserve and payment options following Tesla’s announcement that it bought $1.5b worth of Crypto. Twitter says it could use it to pay the salaries of its staff.
The deputy governor of the Bank of Canada, Tim Lane, recently revealed that the bank has accelerated plans to potentially create a digital currency.
Lane said, “For several years, the Bank of Canada has been analyzing which circumstances might lead Canada to decide to issue a digital currency. The pandemic may bring us to a decision point sooner than we had anticipated.”
Oil prices post longest winning streak in two years
The crude oil market extended its bullish run for the 9-straight day, being the longest streak of consecutive daily gains in two years.
Brent Crude oil gained 0.65% in Wednesday’strading to stand at $61.56 per barrel from $61.16 recorded on Tuesday.
The rise in crude oil prices could be attributed to the supply curbs from OPEC+ and Saudi Arabia as well as the recent drop in inventories. Energy Information Administration (EIA) had reported a crude oil inventory draw of 6.6 million barrels last week.
Meanwhile, WTI closed at $58.58(+0.29%), OPEC Basket at $28 (+1.17%) while Bonny Light closed at $61.37 (+3.21%).
It is worth noting that Nigeria’s Minister of State, Petroleum Resources, TimipreSylva said on Tuesday that the federal government has set a target of $10 or less per barrel production cost for Nigeria’s oil industry.
External reserve on a decline despite rallying oil prices
Nigeria’s external reserve stood at $35.89 billion as of Tuesday 9th February 2021, indicating a 0.11% decline when compared to $35.93 billion recorded as of Monday 8th February 2021.
The foreign reserve has recorded a steady decline since the 25th of January 2021, despite the positive growth recorded in the global oil market.
Meanwhile, Nigeria needs external reserves to hit $40 billion if it is to adequately meet some of the pent-up demand that has piled up since 2020 as a result of the oil price war and covid-19 lockdown.