Thursday 18th February 2021: The exchange rate between the naira and the dollar appreciated closing at N407.80/$1 at the NAFEX (I&E Window) where forex is traded officially. This is as Nigeria’s external reserve loses $994 million in 23 days.
Key Highlights
- The naira sold as high as N424.15/$1 during intra-day trading
- Naira closed against the US Dollar at N407.80/$1, representing a 0.54% gain when compared to the N410/$1 recorded at the end of trade on Wednesday, February 17, 2021. This also represents the eight straight trading day the Naira closed in the N400/$1 region.
- At the parallel market where forex is traded unofficially, the naira appreciated marginally closing at N477/$1 on Thursday, February 18, representing a 0.21% gain when compared to the N478/$1 that it closed on the previous trading day
- Also, Nigeria’s external reserves lost $124 million in 3 days as it fell to $35.633 billion as of February 15, 2021, from $35.757 billion as of February 12, 2021, according to data from CBN. The exchange rate has now lost $1 billion in less than a month.
READ: NAFEX exchange rate closes N400/$1 as crude oil prices maintains hot streak
Trading at the official NAFEX window
The Naira appreciated against the dollar at the Investors and Exporters (I&E) window on Thursday, closing at N407.80/$1. This represents a N2.20 gain when compared with the N410/$1 that it closed on the previous trading day.
- The opening indicative rate closed at N407.13 to a dollar on Thursday. This represents a 37 kobo drop when compared to N406.76 to a dollar that was recorded the previous trading day on Wednesday, February 17, 2021.
- An exchange rate of N424.15 to a dollar was the highest rate during intra-day trading before it closed at N407.80 to a dollar. It also sold for as low as N390/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window rose by 53.7% on Thursday, February 18, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $40.79 million on Wednesday, February 17, 2021, to $62.69 million on Thursday, February 18, 2021.
READ: Nigeria’s external reserve drop by $261 million in 15 days, oil firms to sell forex to CBN
Cryptocurrency Watch
The world’s largest cryptocurrency, Bitcoin, reached a new record high as it crossed the $52,000 mark, gaining 8.30% over the last 24 hours.
- This was just a day after bitcoin topped $51,000 as it traded at $52,130
- Bitcoin’s current market capitalization is over $972 billion, while the entire crypto market capitalization accounts for more than $1.5 trillion presently.
- The new high extends a bull run for bitcoin that began last October.
- The latest surge is coming up after JP Morgan analysts publishes a note saying that the current price appears unsustainable. They said that this year’s price surge has been more influenced by speculative flows.
- A single bitcoin now trades for N21.22 million up 1.8% while Etherum trades for N739k up 5.6%.
READ: World Bank says Nigerian banks are at risk of being destabilised by COVID-19
Oil price reverses earlier gains but still above $63 mark
Brent crude oil price hit $63.75, on Thursday evening, as oil prices retreated from earlier gains to trade lower just afternoon on Thursday.
- The severe winter storms continued to move east, leaving at least 20 people and millions without electricity from Texas to New England.
- Earlier in the day, oil prices went higher after the Energy Information Administration reported crude oil inventories in the United States had shed 7.3 million barrels in the week to February 12.
- The American Petroleum Institute had a day earlier seen the crude oil inventories down 5.8 million barrels for the week to February 12.
- The rise in oil prices this week, have been supported by the disruptions to oil production and refineries that the severe winter weather caused in Texas.
- The International Energy Agency (IEA) expects that a recovery in global oil demand would outstrip production in the second half of the year, prompting even quicker inventory draws
- Meanwhile, WTI Crude closed at $60.41 (-0.73), Bonny Light $62.48 (+0.62), and OPEC Basket $62.48 (-0.12).
READ: LCCI, MAN task CBN to review Nigeria’s foreign exchange policies
Nigeria’s external reserve dips despite rallying oil prices
- The external reserve continued its downward slide to close at $35.527 billion as of February 17, 2021.
- This represents a decline of 0.15% compared to $35.580 billion as of 16th February 2021.
- The foreign reserve has been on a steady decline since the 25th of January 2021, losing a total of $994 million to date.
- The exchange rate has now lost $1 billion in less than a month dropping from $36.5 billion as of January 25th, 2021.
