The exchange rate between the naira and the US Dollar closed at N406.50/$1, at the Investors and Exporters window on Thursday.
Naira appreciated against the US Dollar on Thursday as it closed at N406.50 to a dollar at the NAFEX window, representing a 1.1% gain when compared to N411 recorded on the previous trading day as dollar supply improves in the forex market.
Meanwhile, the naira remained stable against the dollar to close at N480/$1 on Thursday, March 4, 2021. This was the same rate that it closed on the previous trading day.
The forex turnover at the Investor and Exporters (I&E) window dropped by 44% from $59.17 million recorded on Tuesday to $33.15 million on Wednesday, March 3, 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 appreciated against the US Dollar at the Investors and Exporters window on Thursday to close at N406.50/$1. This represents a N4.50 gain when compared to N411 recorded on the previous trading day.
- The opening indicative rate closed at N411.10 to a dollar on Thursday. This represents a 44 kobo drop when compared to N410.66/$1 recorded on Wednesday.
- Also, an exchange rate of N427.45 to a dollar was the highest rate during intra-day trading before it closed at N406.50/$1. It also sold for as low as N389.25/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window rose by 102% on Thursday, March 4, 2021.
- According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $33.15 million recorded on Wednesday, March 3, 2021, to $66.99 million on Thursday, March 4, 2021.
READ: Nigeria’s ratings risk downgrade over rising debt and lower revenue
Cryptocurrency watch
The world’s largest cryptocurrency, Bitcoin, after yesterday’s rally, dropped by 7.60% to close above $46,000 compared to its previous closing at about $51,000.
- The digital currency had earlier slipped 3% in early US trading on Thursday, hovering around $49,000.
- Prices have surged almost 600% since the start of 2020 on the back of wider mainstream adoption, with bulls seeing it as both an inflation hedge and speculative asset.
- Jesse Powell, the CEO of Kraken Exchange, in an interview with Bloomberg Television, said Bitcoin could reach $1 million in the next decade, adding that supporters say it could eventually replace all of the major fiat currencies
- Bitcoin was trading below $44,000 earlier this week, having hit an all-time high the week before above $58,000. Its rebound suggest the third great price rally in its history may still be underway
- Meanwhile, Ether ETH=BTSP, the coin linked to the Ethereum blockchain network, dropped by 6.9% to $1,478.17 on Thursday.
READ: Nigeria’s foreign reserves fall to 6-weeks low, lose $81.10 million
Oil price decline
Brent Crude oil rose by $2.67 on Thursday evening to close at $66.74 representing a 4.2% increase when compared to $64.07 recorded on the previous trading day.
- Saudi Arabia and its OPEC+ allies shocked the oil market with a decision to keep the supply in check, sending prices surging and adding inflationary pressure to the global economy as it emerges from the pandemic.
- A year after a bitter price war that sent crude crashing below zero, Saudi Arabia showed that its priority is preserving the hard-won oil recovery rather than worrying about tightening the market too much.
- That means the cartel will still be withholding about 7 million barrels a day from the market, equivalent to about 7% of global demand, even as fuel consumption recovers in many countries.
- WTI Crude closed at $64.39 (0.88%), OPEC Basket $62.15 (+0.29%), Bonny Light $66.12 (+4.77%), and Natural Gas $2,743 (-0.11%).
External reserve dips to lowest in two months
Nigeria’s external reserve continued its decline as it dropped by 0.12% to $34.915 billion as of March 3, 2021, compared to $34.957 billion recorded as of March 2, 2021.
- This represents the lowest external reserve position Nigeria has recorded in over 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.
- 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.
