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Currencies

Naira gains at NAFEX window as external reserve plunges $1.1 billion in less than a month

Naira appreciated against the US Dollar at the Investors and Exporters window on Tuesday.

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Naira stabilizes at black market as CBN continues its intervention in forex market

Tuesday 23rd February 2021: The exchange rate between the Naira and the US Dollar closed at N408.6/$1 at the Investors and Exporters window.

Naira gained N1.4 against the US Dollar to close at N408.6 to a dollar at the NAFEX window, which represents a 0.34% gain compared to N410/$1 recorded on Monday.

Meanwhile, the exchange rate remained stable in the parallel market, as it closed at N480/$1 on Tuesday, the same as recorded on the previous trading day.

READ: Naira will “suffer further devaluation” – MTEF

Trading at the official NAFEX window

Naira appreciated against the US Dollar at the Investors and Exporters window on Tuesday, as it closed at N408.6/$1. This represents a 0.34% gain when compared to N410/$1 recorded a day earlier.

  • The opening indicative rate closed at N409.5 to a dollar on Tuesday. This represents a N1.46 drop when compared to N409.5 to a dollar that was recorded the previous trading day on Monday, February 22, 2021.
  • Also, an exchange rate of N429.75 to a dollar was the highest rate during intra-day trading before it closed at N408.6/$1. It also sold for as low as N388.75/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window increased by 134.6% on Tuesday, February 23, 2021.
  • According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $52.58 million recorded on Monday, February 22, 2021, to $423.37 million on Tuesday, February 23, 2021.
  • A cursory look at the data shows that Tuesday’s figure of $123.37 million is the highest turnover recorded since 14th January 2021, over a month ago.

READ: Nigeria’s external reserve drop by $261 million in 15 days, oil firms to sell forex to CBN 

Cryptocurrency watch

The crypto market lost significantly today, Tuesday 23rd February 2021, as selling pressure pushed the value of crypto assets lower amid sudden panic among retail and institutional traders.

  • Specifically, bitcoin lost about 13.14% to stand at $47,055 on Tuesday as at 8:11 pm, indicating a decline of over $7,000 in a single day.
  • This extends a sharp withdrawal from a record high, that it hit on Sunday, although Bitcoin remains up about 75% year to date.
  • Also, Ethereum dipped by 15.72%, while XRP recorded a 16.93% decline on Tuesday.
  • Meanwhile, the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele appeared before the Senate on Tuesday to defend the ban placed on cryptocurrency transactions in the country.
  • He briefed the national assembly on the opportunities and threats associated with cryptocurrency and how it affects the nation’s economy and security.

READ: Nigerian stocks record gains, investors gain N132.8 billion

Oil prices rise amid OPEC+ meeting in March

Brent crude oil price rose by 0.61% on Tuesday to close at $65.64 compared to $64.63 recorded on Monday 22nd February 2021.

  • The price increase came after Goldman Sach forecasted that oil prices would climb around $70 per barrel in the second quarter of the year and $75 in Q3 2021. This is $10 above its previous forecasts.
  • The bank also stated that consumption will return to pre-virus levels by late July, while output from major producers will remain “highly inelastic” to the rising prices.
  • Meanwhile, Saudi Arabia and Russia are heading to the OPEC+ meeting next week with varying opinions on whether to add more supply to the market in April, which could shape the performance of the oil market.
  • However, Brent closed at $65.47 (+0.35%), WTI closed at $61.74 (+0.06%), Bonny Light at $62.83 (+1.19%), OPEC Basket ($62), and Natural Gas closed at $2.882 (-2.4%).

Nigeria lost over $1.1 billion in external reserves position

Nigeria’s external reserve dipped by 0.41% on Monday 22nd of February 2021, to stand at $35.28 billion.

  • This represents a decline of $145.9 million in foreign reserve, the highest single-day loss since April 2020.
  • Nigeria’s external reserve position has now hit its lowest level in almost two months, losing over $1.1 billion in less than a month.
  • This downturn has continued to persist despite bullish trends in the global crude oil market. However, Nigeria will need to boost its external reserve to hit $40 billion, as this will help meet some of the pent-up demand that has piled up as a result of the crash in global oil prices in 2020.

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Currencies

Exchange rate stabilises at N410/$1 as oil price rallies above $65 per barrel

The exchange rate between the Naira and the US Dollar closed at N410/$1 at the Investors and Exporters window on Monday as oil prices hit $65.24 per barrel

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Naira falls across forex markets as businesses resume after public holidays

Monday 22nd February 2021: The exchange rate between the Naira and the US Dollar closed at N410/$1 at the Investors and Exporters window, where forex is traded officially.

Naira remained stable on the NAFEX window to stand at N470 to a dollar on Monday, which is the same rate it closed on the previous trading day.

Also, Naira depreciated on the parallel market to close at N480/$1 on Monday, 22nd February 2021. This represents a N2 drop when compared to N478/$1 recorded on Friday, 19th February 2021.

Brent Crude oil price hit a record high as it closed at $65.24 per barrel as Goldman Sach’s projection indicates bullish trades in Q2 2020.

Trading at the official NAFEX window

The exchange rate between the Naira and Dollar at the Investors and Exporters (I&E) window maintained the same rate as recorded on Friday last week to close at N410/$1 on Monday, 22nd February 2021.

  • The opening indicative rate closed at N408.04 to a dollar on Monday. This represents a 43 kobo drop when compared to N407.61 to a dollar that was recorded the previous trading day on Friday, February 19, 2021.
  • An exchange rate of N412 to a dollar was the highest rate during intra-day trading before it closed at N410/$1. It also sold for as low as N389.75/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window declined by 20.8% on Monday, February 22, 2021.
  • According to the data tracked by Nairametrics from FMDQ, forex turnover decreased from $66.41 million recorded on Friday, February 19, 2021, to $52.58 million on Monday, February 22, 2021.

READ: Industrial index down by 5.7%, as shares of BUA, Lafarge, Dangote, others decline

Cryptocurrency Watch

  • The largest cryptocurrency in the world, Bitcoin dipped by 4.76% on Monday to stand $54,753.48 as of 11:10pm.
  • This came after the world’s richest man, Elon Musk disclosed that the price of bitcoin and Ethereum seems to be high.
  • Meanwhile, three days ago, the world’s most demanded crypto-asset breached the $1 trillion market capitalisation to become the sixth most-valuable asset worldwide.
  • It is worth noting that, following the directive of the CBN prohibiting regulated financial institutions from dealing with Cryptos, Nigerians have moved towards peer-to-peer transactions trading directly without a third party.
  • According to a recent study seen by Nairametrics, the use of Bitcoin for peer-to-peer lending in Nigeria surged by 16% since the CBN directive took effect about 18 days ago

Crude oil prices top $64 per barrel

Crude oil prices picked up again on Monday as Brent Crude gained an additional $2.33 to close at $65.24 per barrel.

  • The increase represents a 3.7% increase when compared to $62.91 per barrel recorded on the previous trading day.
  • The price increase came shortly after Goldman Sach forecasted that oil prices would climb around $70 per barrel in the second quarter of the year.
  • It could also be attributed to the realization that U.S oil production and refineries will take a bit of time to resume their normal level of output after the Texas Freeze knocked out oil refineries.
  • The oil market rallied despite the news that Saudi Arabia and Russia might be on the verge of a disagreement again over output agreement, which the group will deliberate on in March.
  • Meanwhile, Brent closed at $65.24 (+3.7%), WTI closed at $61.49 (+3.8%), Bonny Light at $62.09 (-1.16%), and Natural Gas closed at $2.946 (-0.24%).

READ: Oil traders go wary on energy demand, mutant strains of COVID-19

Declining external reserve despite bullish oil prices

Nigeria’s external reserve dipped further on Thursday, 18th February 2021, to stand at $35.47 billion.

  • This represents a decline of 0.15% compared to $35.53 billion recorded as of Wednesday, 17th February 2021.
  • Despite rallying oil prices, Nigeria’s external reserve has recorded a steady decline since the 25th of January 2021, losing a sum of $958.1 million in less than a month.
  • It is worth noting that despite the significant increase recorded earlier in January, the current reserve positive is only $99.9 million more than $35.37 billion recorded as of 31st December 2020.

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Currencies

Exchange rate weakens at NAFEX window as Naira settles at N410/$1

Naira closed against the US Dollar at N410/$1 on Friday, 19th February 2021, indicating a drop of 0.54%

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Friday 19th February 2021: The exchange rate between the Naira and the US Dollar closed at N410/$1 at the NAFEX window, where forex is traded officially.

Naira closed against the US Dollar at N410/$1, representing a 0.54% drop compared to N407.8/$1 recorded on Thursday 18th February 2021. This is the second time in the week that the exchange rate has closed at N410/$1 and the ninth consecutive trading day it closed over N400/$1.

Also, Naira depreciated at the parallel market to close at N478/$1 on Friday, 19th February 2021This represents a N1 shortfall compared to N477/$1 recorded on the previous day. 

READ: Why Nigeria’s external reserves is stuck at $35 billion

Trading at the official NAFEX window

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N410/$1 for the second time in the week. This represents a N2.2 drop when compared with the N407.8/$1 that it closed on the previous trading day. 

  • The opening indicative rate closed at N407.61 to a dollar on Friday. This represents a 48 kobo drop when compared to N407.13 to a dollar that was recorded the previous trading day on Thursday, February 18, 2021. 
  • An exchange rate of N424.15 to a dollar was the highest rate during intra-day trading before it closed at N410/$1. It also sold for as low as N390/$1 during intra-day trading. 
  • It is also worth noting that throughout the week, the lowest rate during any inter-day trading was N390/$1. 
  • However, forex turnover at the Investor and Exporters (I&E) window rose by 5.9% on Friday, February 19, 2021. 
  • According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $62.69 million on Thursday, February 18, 2021, to $66.41 million on Friday, February 19, 2021. 

READ: Why Nigerian stocks are getting pummeled

Cryptocurrency Watch

Bitcoin, the largest cryptocurrency in the world reached an all-time high on Sunday, 21st 2021 to stand at $58,022.48 as of 9:37 pm. 

  • This is just two days after the world’s most demanded crypto-asset breached the $1 trillion market capitalisation to become the sixth most-valuable asset worldwide. 
  • So far in the year, Bitcoin has gained 97.2% from $29,424.17 recorded as of 31st of December 2020. 
  • Meanwhile, the richest man in the world, Elon Musk disclosed through his twitter handle that the price of the two leading cryptos seems to be in overbought territory. 
  • However, popular American online financial advisory company, Motley Fool disclosed that it will be investing $5 million in Bitcoins in the coming weeks using the firm’s fund. 

Oil price dips as Saudi Arabia moves to reverse oil production cut

Crude oil price (Brent crude) dipped on Friday, 19th February 2021 to close at $62.91. 

  • Brent Crude oil price declined by 1.6% to close at $62.91 on Friday. 
  • The decline in oil prices came on the back of Saudi Arabia’s move to increase oil output. According to reports during the week Saudi Arabia is poised to reverse its 1mbpd voluntary production cut in the coming weeks. 
  • Also, about 4mb/d of US oil production was sidelined due to power outages and other equipment failures during the week, which include the damage of four of Texas’ largest oil refineries. A development that is expected to reduce crude oil demand. 
  • Meanwhile, WTI closed at $59.24 (-2.12%), OPEC Basket gained 1.52% to close at $63.43, Bonny Light closed at $62.09 (-1.16%) while Natural gas dipped by 0.42% to settle at $3.069. 

Dwindling external reserve

  • Nigeria’s external reserve dipped further by Thursday, 18th February 2021, to stand at $35.47 billion. 
  • This represents a decline of 0.15% compared to $35.53 billion recorded as Wednesday, 17th February 2021. 
  • Despite rallying oil prices, Nigeria’s external reserve has recorded a steady decline since 25th of January 2021, losing a sum of $958.1 million in less than a month. 
  • It is worth noting that despite the significant increase recorded earlier in January, the current reserve positive is only $99.9 million more than $35.37 billion recorded as of 31st December 2020. 

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