Tuesday 9th March 2021: The exchange rate between the naira and the US Dollar closed at N412 to a dollar at the Investors and Exporters window.
Naira depreciated yet again at the NAFEX window to close at a record low of N412/$1 on Tuesday 9th March 2021, representing a 0.03% decline when compared to N411.88/$1 recorded on Monday, 8th March 2021.
Also, Naira weakened further against the US Dollar in the parallel market to close at N482/$1 on Tuesday, 9th March 2021, despite recording a similar decline on Monday. This decline at the NAFEX window and at the parallel market came on the back of CBN’s announcement of a Naira4Dollar scheme.
According to the Apex bank, beneficiaries of diaspora remittances will be paid N5 for every $1 remitted through the banks.
READ: Why external reserves is falling despite a rise in oil prices
Trading at the official NAFEX window
Naira depreciated further against the US Dollar to a record low at the Investors and Exporters window on Tuesday to close at N412 to a dollar. This represents a 12 kobo decline when compared to N411.88/$1 recorded on the previous trading day.
- The opening indicative rate closed at N410.91 to a dollar on Monday. This represents a 73 kobo gain when compared to N411.64/$1 recorded on Monday.
- Also, an exchange rate of N415 to a dollar was the highest rate during intra-day trading before it closed at N412/$1. It also sold for as low as N390/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window skyrocketed by 237.7% on Tuesday, 9th March 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ, forex turnover increased from $32.58 million recorded on Monday, March 8, 2021, to $110.01 million on Tuesday, March 9, 2021.
READ: MTN Nigeria records gain, investors profit up by N42 billion
Cryptocurrency watch
The world’s flagship cryptocurrency, Bitcoin surged by 3.56% to trade at 54.294.73 as at 11.34 pm on Tuesday, 9th February 2021 compared to $503,299.51 recorded around the same time on Monday.
- This increase came after Norwegian oil billionaire Kjell Inge Rokke, owner of Aker Asa announced that his company has established a business, Seetee AS to tap into the potential of the cryptocurrency.
- According to him, he believes that bitcoin could become the core of a new monetary architecture and each coin could be worth millions of dollars.
- Meanwhile, onchain data have revealed that bitcoin exchange balances held on popular trading platforms have continued to deplete since October 2020.
- The analysis shows that popular trading exchanges like Coinbase, Binance, Huobi, and many other platforms have lost 20% of bitcoin balances during the last 12 months.
- This suggests that investors are accumulating, rather than selling the bitcoin on exchanges.
READ: Naira strengthens at NAFEX window as dollar supply improves in forex market
Oil prices lose further grounds
Brent Crude oil on Tuesday dipped further by 1.41% to close at $67.28 on Tuesday 9th March 2021, after the American Petroleum Institute (API) reported a build in crude oil inventories of 12.792 million barrels for the week ending March 5.
- The various crude oil products decline on Tuesday, despite Brent Crude rallying above the predicted $70 per barrel in the early hours of Monday.
- The decline can also be attributed to the attack by rebel Houthi rebel on the Saudi oil infrastructure on Sunday.
- The ministry of Suadi Arabia confirmed that shrapnel from a ballistic missile fell near Saudi Aramco’s residential area in Dhahran.
- WTI Crude closed at $64.01 (-1.6%), OPEC Basket $67.05 (+7.88%), Bonny Light $66.71 (-1.78%), and Natural Gas $2.662 (-0.08%).
External reserves persistent decline
Nigeria’s external reserve continued its decline as it dropped by 0.29% on Monday, 8th March 2021 to stand at $34.74, being its highest daily decline in over 10 days.
- The country’s external reserve declined from $34.84 billion recorded last week Friday to stand at $34.74 billion as of 8th March 2021.
- It is worth noting that Nigeria’s external reserve has depleted to its lowest position in 10 months, which was as of 11th May 2020 when the reserve was at $34.66 billion.
- The CBN has however introduced a “Naira4Dollar” scheme in favour of diaspora Nigerians who are seeking to send in money into Nigeria. This is aimed at ensuring that remittance flows and diaspora investments become a significant source of external financing.
