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Currencies

CBN Governor confirms adjustment of naira to N410/$1 at official market

The CBN Governor has confirmed that the naira has depreciated at the official market to N410 against the dollar.

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The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has confirmed that the naira has depreciated at the official market to N410 against the dollar.

This, the Federal Government hopes to take a more dramatic step to increase exports in order to earn foreign exchange to boost dollar supply.

According to a report by Punch, this disclosure was made by Emefiele, while speaking at a special summit on the economy organized by Vanguard Newspaper in collaboration with the CBN and Chief Executive Officers of banks on Friday, February 26, 2021, in Lagos.

What the CBN Governor is saying

Emefiele said the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.

He said, “In order to adjust for the decrease in the supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$.’’

What the Vice President, Yemi Osibanjo, is saying

The Vice President, Prof. Yemi Osibanjo, who was part of the event said the Federal Government would address the shortage of foreign exchange.

He said, “We have accepted that we need to take a more dramatic step to boost exports in order to earn foreign exchange.’

While pointing out that the government would combine limited resources to expand the supply base, Osibanjo said the Federal Government would ensure the expansion and promotion of export trading houses, ensure that companies in the special economic zones exported most of their productions, as well as expand the export grant scheme.

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What you should know

  • Nairametrics had reported about 2 weeks ago that the exchange rate between the naira and the dollar had been adjusted at the Investors and Exporters window where forex is traded officially as it had closed above N400/$1 since the second week in February.
  • An exchange rate of N400 and above is perhaps a confirmation that official exchange rates across the multiple windows are crawling towards the target Non-Deliverable Forward (NDF) rates approved by the CBN.
  • The CBN had maybe set the stage for the recent depreciation of the naira when on February 2nd it revised its one-year Non-Deliverable Forwards (NDF) for which it intends to settle foreign exchange futures contracts.
  • In the contract terminating on February 24, 2021, the CBN priced the dollar at N412.14, compared to the average price of N395/$1 traded at the Investors and Exporters (I&E) window. Several days later, the exchange rate at the NAFEX market started depreciating initially touching N397/$1 before it crossed N400/$1 on the 9th of February 2021

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 gains at black market as external reserves increases by $620 million in 2 weeks

    The opening indicative rate closed at N410.88 to a dollar on Monday.

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    on

    Naira’s true worth,Naira gains on the dollar for the first time since March, Naira forwards hit record high as it crashes to N420/dollar in the parallel market, Naira hits N500 to $1 at the forward market, Naira hits N509 to the dollar at forwards market, demand for the U.S dollar climbs up, Naira hits $387.35 to $1 at currency spot market , Naira sells at N456, Nigeria’s Foreign Reserves drop by over $3 billion in Q1 2020, Investors and Exporters (I&E) window, Naira gains against the dollar, CBN close in on currency speculators

    Monday,12th April 2021: The naira appreciated against the dollar at the parallel market on Monday, 12th April 2021 to close at N482 to a dollar. This represents a N3 gain when compared to the N485/$1 that was recorded on Friday, April 9, 2021.

    Meanwhile, the exchange rate between Naira and the US Dollar closed at N409.75/1$ in the Importers and Exporters window, where forex is traded officially.

    Naira depreciated against the US Dollar at the NAFEX window on Monday to close at N409.75/$1. This represents a 0.18% drop when compared to N409/$1 recorded on Friday, as the country’s external reserve increased by $620 million in 2 weeks.

    READ: Naira strengthens at NAFEX window as bitcoin slumps to $52k

    Trading at the official NAFEX window

    Naira depreciated against the US Dollar at the Investors and Exporters window on Monday to close at N409.75 to a dollar. This represents a 75 kobo drop when compared to N409/$1 recorded on Friday, 9th April 2021.

    • The opening indicative rate closed at N410.88 to a dollar on Monday. This represents a N1.09 drop when compared to N409.79/$1 recorded on Friday.
    • Also, an exchange rate of N420 to a dollar was the highest rate recorded during intra-day trading before it closed at N409.75/$1. It also sold for as low as N400/$1 during intra-day trading.
    • Forex turnover at the Investor and Exporters (I&E) window dropped by 17.9% on Monday, 12th April 2021.
    • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined from $55.21 million recorded on Friday, April 9, 2021, to $45.35 million on Monday, April 12, 2021.

    READ: Naira appreciates at NAFEX as Nigeria’s external reserve is set to get a boost

    Cryptocurrency watch

    The world’s most popular digital currency, bitcoin, rose by as much as 2.6% to $61,229 on Monday, nearing an all-time high as bullish sentiment gathered steam ahead of listing by the largest US cryptocurrency exchange.

    • The cryptocurrency is up almost nine times in the past year, a return that towers above that of more familiar assets like equities or bullion.
    • Against the backdrop of Wall Street’s growing embrace of crypto, the direct listing of digital-token exchange Coinbase Global Inc. is generating a lot of interest.
    • Coinbase is moving towards a $100 billion valuation as it is due to go public on the Nasdaq on April 14, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.
    • The digital currency has been widely adopted by many, replacing gold as the global digital-reserve asset.
    • Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance Coin, known as BNB, rose 23% on Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.

    READ: Best performing mining, industrial and consumer goods stocks from last week

    Sigma Pensions

    Oil price gain

    Brent crude oil price rose on Monday evening as it closed at $63.34 per barrel, indicating a 0.51% increase compared to $63.02 recorded at the close of trade on Sunday on expectations of strong economic recovery.

    • Oil prices recorded an increase early on Monday, with WTI Crude topping $60 a barrel for the first time in a week after the Federal Reserve Chairman, Jerome Powell, said that the outlook on the U.S. economy had brightened substantially.
    • A weaker U.S. dollar also added to investors’ appetite for crude, while another claim from the Yemeni rebel group, the Houthis that they had targeted oil facilities of Aramco in Saudi Arabia further supported prices.
    • Saxo Bank analysts said that the prospect for stronger economic growth helped to offset the impact of a resurgent coronavirus just as OPEC+ prepares to ease production cuts.
    • Brent Crude closed at $63.34 (+0.09%), WTI Crude closed at $59.75 indicating 0.08% gain, Bonny Light, $62.20 (+1.06%), OPEC Basket (-0.13%) to close at $61.14 while Natural gas dropped by 0.27% to close at $2.554.

    External reserve

    Nigeria’s external reserve gained $30 million on Friday, 9th April 2021 to close at $35.036 billion, being the highest external reserve position recorded in over a month.

    • This indicates a 0.09% increase when compared to $35.006 billion recorded on Thursday, 8th April 2021.
    • It also represents an increase in the country’s external reserve position for the 14th consecutive day, having endured a significant downturn earlier in the year. Nigeria’s reserve has added a total of about $620 million in 14 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 a further boost, as the Federal Government recently announced plans to issue $500 million Eurobonds for 2021.

    Continue Reading

    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.

    Published

    on

    Naira falls across forex markets as businesses resume after public holidays

    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 

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    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.

    Continue Reading

      





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