Monday 1st March 2021: The exchange rate between the naira and the US Dollar closed at N409.2/$1 at the Investors and Exporters window.
Naira appreciated against the US Dollar on Monday as it closed at N409.2 to a dollar at the NAFEX window, representing a 0.26% gain when compared to N410.25 recorded on the previous trading day.
Meanwhile, the exchange rate remained stable in the parallel market at N482/$1 on Monday after enduring a depreciation of N2 last week Friday from N480/$1 recorded on the previous day.
Also, forex turnover at the Investor and Exporters (I&E) window decreased by 35% from $37.49 million recorded on Friday to $24.38 million on Monday, 1st March 2021.
READ: Naira gains at NAFEX window as external reserve plunges $1.1 billion in less than a month
Trading at the official NAFEX window
The Naira gained against the US Dollar at the Investors and Exporters window on Monday to close at N409.2/$1. This represents a N1.05 gain when compared to N10.25 recorded on the previous trading day.
- The opening indicative rate closed at N409.3 to a dollar on Monday. This represents a 6 kobo gain when compared to N409.24/$1 recorded on Friday.
- Also, an exchange rate of N415 to a dollar was the highest rate during intra-day trading before it closed at N409.2/$1. It also sold for as low as N381/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window dropped to its lowest level in over a month as it declined by 35% on Monday, March 1, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover decreased from $37.49 million recorded on Friday, February 26, 2021, to $24.38 million on Monday, March 1, 2021.
Cryptocurrency watch
The world’s largest cryptocurrency, Bitcoin gained significantly on Monday to close at $49,629.33 compared to its previous closing of $43,165.78.
- The highly volatile digital asset has risen 76.2% from the year’s low of $27,734 recorded on the 4th of January 2021.
- The world’s biggest and best-known cryptocurrency has however fallen by 16.3% from the year’s high of $58,354 recorded on the 21st of February 2021.
- Meanwhile, Ether ETH=BTSP, the coin linked to the ethereum blockchain network, rose by 8.74% to $1,546.06 on Monday, adding $124.29 to its previous close.
READ: Naira strengthens at NAFEX window despite 79.3% drop in dollar supply
Oil price decline
Brent Crude oil dipped $0.73 on Monday to close at $63.96 representing a 1.13% decline when compared to $64.42 recorded on the previous trading day.
- Although oil prices had rallied earlier in the day after the U.S House passed the stimulus package of $1.9 trillion and another COVID-19 vaccine was approved for use in the United States.
- The progress in the stimulus package approved by the House on Saturday after weeks of impasses lifted the sentiment on the oil market on Monday before recording a downturn later in the day to close negative.
- Meanwhile, Analysts are expecting next week’s meeting of OPEC and its allies to result in more supply returning to the market as the oil prices rally over $60 per barrel.
- WTI Crude closed at $60.04 (-0.99%), OPEC Basket (-1.61%), Bonny Light (-0.58%), and Natural Gas (+0.04%).
External reserve dips to lowest in two months
Nigeria’s external reserve declined by 0.1% to stand at $35.1 billion as of February 246h 2021 compared to $35.14 billion recorded as of 25th of February.
- This represents the lowest external reserve position Nigeria has recorded in two-months when it stood at $34.98 billion as of 24, December 2020.
- It is also worth noting that Nigeria lost over $1.2 billion in external reserves in the month of February.
- According to data obtained from the Central Bank of Nigeria (CBN), external reserves declined from $36.3 billion as of 29th of January 2021 to $35.1 billion as of 26th of February 2021.
- The decline in Nigeria’s external reserve has persisted in the month of February, despite rallying oil prices in the month. This is a cause for worry, as Nigeria will hope to boost its reserve in order to meet up with its accumulated needs, hindered by the crash in oil prices earlier in 2020.