Currencies
Naira gains at NAFEX as oil prices record biggest single day loss in 11 months
The Naira appreciated marginally against the US Dollar at NAFEX window on Thursday, 18th March, to close at N409.67/$1.
Thursday 18th March 2021: The exchange rate between the naira and the US Dollar closed at N409.67 to a dollar at the Investors and Exporters window.
The Naira appreciated marginally against the US Dollar on Thursday, 18th March, to close at N409.67/$1. This represents a 0.02% gain when compared with the N409.75/$1 that was recorded on Wednesday, 17th March 2021 despite oil prices recording the single biggest day loss in 11 months
Also, the Naira maintained stability against the US Dollar in the parallel market, to close at N485 to a dollar. the same as the rate that was recorded on the previous day.
READ: Why external reserves is falling despite a rise in oil prices
Trading at the official NAFEX window
Naira appreciated against the US Dollar at the Investors and Exporters window on Thursday to close at N409.67 to a dollar. This represents an 8 kobo gain when compared to the N409.75 to a dollar that was recorded on Tuesday, March 17, 2021.
- The opening indicative rate closed at N409.14 to a dollar on Thursday. This represents a 64 kobo gain when compared to N409.78/$1 recorded on Wednesday.
- Also, an exchange rate of N412 to a dollar was the highest rate during intra-day trading before it closed at N409.67/$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 33.9% on Thursday, 18th March 2021.
- A look at the data tracked by Nairametrics from FMDQ, forex turnover declined from $148.54 million recorded on Wednesday, March 17, 2021, to $98.20million on Thursday, March 18, 2021
READ: Naira strengthens at NAFEX window despite 79.3% drop in dollar supply
Cryptocurrency watch
Bitcoin, the world’s most popular and largest cryptocurrency dropped by 3.77% on Thursday evening to trade at $56,878.47 after trading at about $59,000 earlier in the day following an optimistic forecast by the Federal Reserve Bank.
- The Federal Reserve had reaffirmed its expectation to keep interest rates close to zero at least throughout 2023 potentially bolstering the cryptocurrency’s appeal as a hedge against faster inflation.
- A lot of analysts have said that a key reason why bitcoin’s price has doubled this year is because very few holders are willing to part with the cryptocurrency, meaning you have more buyers than sellers.
- The price is also partly boosted because of demand from institutional investors who are looking for an asset that might hold its worth if the dollar’s purchasing power declines.
READ: FG approves $1.5 billion for immediate rehabilitation of Port Harcourt refinery
Oil prices continue to decline
Brent Crude oil on Thursday 18th March 2021 dropped for a fifth consecutive trading day by 6.64% to close at $63.28, as oil sees the biggest single-day loss since April 2020.
- Despite initial positive prediction during the recent price rally, some analysts have been more cautious in their outlooks, having warned for a couple of weeks that the present optimism in the oil markets was unjustified.
- The recent rally was largely due to production cuts by OPEC+ or rather, the fact that they agreed to hold production steady in April, instead of ramping up production as the market had anticipated. The passing of the 3rd round of stimulus in the United States had also bolstered oil market sentiment.
- But a rising dollar, increased crude inventories in the U.S., growing fears of a resurgence in coronavirus cases and vaccine safety concerns in Europe have proven worthy adversaries.
- WTI Crude closed at $64.28 (+0.32%), OPEC Basket $66.89 (-.89%), Bonny Light $66.20 (-1.05%), and Natural Gas $2,508 (-0.79%).
READ: NSE-30 companies lose N1.13 trillion in market capitalisation year-to-date
External reserve sustains decline
Nigeria’s external reserve declined by 0.09% on Wednesday, 17th March 2021 to stand at $34.44 billion being a record low in 10 months.
- The country’s external reserve declined from $34.48 billion recorded as of Tuesday, 16th March 2021 to stand at $34.44 billion as of 17th March 2021.
- Nigeria’s current external reserve position indicates a total drop of about $560 million in the month of March 2021.
- In December 2020, when the external reserve was $36.4 billion the CBN claimed it could finance 8.4 months of import of goods or 6.3 months of import of goods and services.
- This infers that at $34.48 billion, the external reserve can now service about 7.9 months of imports of goods and 5.99 months of imports of goods and services.
Currencies
Exchange rate remains stable at NAFEX window as bitcoin drops below $50k
The exchange rate between Naira and Dollar closed at N410/$1 at the NAFEX window as bitcoin plunged below $50k.
Thursday, 22nd April 2021: The exchange rate between the naira and the US dollar closed at N410/$1 in the Importers and Exporters window.
Naira remained stable on Thursday, at the Nigerian Autonomous Foreign Exchange (NAFEX) window, as the rate closed at N410 to a dollar, the same as recorded on Wednesday, 21st April 2021.
Meanwhile, the naira gained marginally in the parallel market to close at N485/$1 on Thursday. The rate appreciated by 0.21% compared to N486/$1 recorded a day before.
The price of the world’s most popular digital instrument dropped on Friday, 23rd April 2021, while Nigeria’s external reserve continues to record a decline.
READ: CBN Governor says Nigeria’s external reserves sufficient to cover 7-months import
Trading at the official NAFEX window
The naira remained stable against the US dollar at the Investors and Exporters window on Thursday to close at N410/$1, the same as recorded on Wednesday.
- The opening indicative rate closed at N409.68 to a dollar on Thursday, 22nd April 2021. This is a 14 kobo depreciation, compared to N409.54/$1 recorded on Wednesday.
- Also, an exchange rate of N436.4 to a dollar was the highest rate recorded during intra-day trading before it settled at N410/$1. It also sold for as low as N394/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window surged by 169.2% on Thursday, 22nd April 2021.
- Data tracked by Nairametrics from FMDQ showed that forex turnover increased from $40.13 million recorded on Wednesday, 21st April 2021, to $108.04 million on Thursday.
READ: Naira gains at black market as external reserves increases by $620 million in 2 weeks
Cryptocurrency watch
The world’s most priced digital asset plunged 3.68% on Friday morning to trade at $49,710
- It dipped below $50k, as of 4:20 am on Friday, 23rd April 2021 as sell-offs by investors put pressure on the most sought-after cryptocurrency in the world.
- Bitcoin has experienced a massive drop over the past few weeks, having enjoyed a significant rise earlier in the year.
- According to a report, the decline signals an imminent reversal from its initial gains witnessed in 2020 and earlier in 2021.
- Historically, Bitcoin has not stayed down for very long, and it has been known to be quite volatile and swing quickly and unexpectedly. Hence, it is hoped that the digital instrument will spring back up, in coming trading sessions.
Crude oil price
The price of crude oil recorded positive growth in the early hours of Friday, 23rd April 2021.
- Brent Crude increased by 0.32% to trade at $65.61, indicating a growth of $0.21, compared to $65.83 recorded at the end of trade on Thursday
- WTI Crude increased by 0.5% to trade at $65.61, while Natural Gas currently sells for an average of $2.752.
- Meanwhile, Libya’s crude oil production has fallen significantly after a company said it would have to reduce output by 100,000 barrels per day.
- Recall that, Nairametrics had reported that Libya’s National Corporation declared force majeure on exports from the port of Hariga due to lack of maintenance funds, consequently shutting down several fields and bringing the country’s production to less than 1 million barrels per day.
External reserve
Nigeria’s external reserve position, reduced by 0.09% on Wednesday 21st April 2021 to stand at $35.15 billion.
- Data obtained from the Central Bank of Nigeria (CBN), revealed that Nigeria’s external reserve dipped from $35.218 billion recorded on 20th April 2021 to $35.15 billion on Wednesday, April 21, 2021.
- This represents the third consecutive decline recorded in the week, having had 19 successive growths in Nigeria’s external reserve.
- The growth recorded was attributed to increasing global oil prices and the movement by the Apex bank to improve dollar inflow into the county.
Currencies
Exchange rate gains at NAFEX window despite decline in forex supply
Nigeria’s exchange rate appreciated against the US dollar on Wednesday to close at N410/$1.
Wednesday, 21st April 2021: The exchange rate between the naira and the US dollar closed at N410 to a dollar at the Importers and Exporters window, where forex is traded officially.
Nigeria’s exchange rate appreciated against the US dollar on Wednesday to close at N410/$1. This represents a 0.16% gain compared to N410.67/$1 recorded on Tuesday, 20th April 2021.
The naira remained stable at the parallel market, closing at N486/$1 on Wednesday, 21st April 2021 after it depreciated by 0.83% in the previous trading session.
Trading at the official NAFEX window
The naira appreciated against the US dollar at the Investors and Exporters window on Wednesday to close at N410/$1. This represents a 67 kobo gain when compared to N410.67/$1 recorded on Tuesday, 20th April 2021.
- The opening indicative rate closed at N409.54 to a dollar on Wednesday. This is 4 kobo depreciation, compared to N409.5/$1 recorded on Tuesday.
- Also, an exchange rate of N422 to a dollar was the highest rate recorded during intra-day trading before it settled at N410/$1. It also sold for as low as N394/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window dipped by 59.7% on Wednesday, 21st April 2021.
- Data tracked by Nairametrics from FMDQ showed that forex turnover decreased from $99.49 million recorded on Tuesday, 20th April 2021, to $40.13 million on Wednesday.
READ: Naira gains at NAFEX window despite 26.2% drop in dollar supply
Cryptocurrency watch
Bitcoin dipped by 3.96% to close at $54,267.91 on Wednesday, 21st April 2021.
- The world’s most sought-after digital asset lost $2,235.28 in Wednesday’s trading session as the total Cryptocurrency market capitalisation dipped by 2.98% to close at $1.97 trillion.
- Since the directive by the CBN to place a ban on crypto transactions in the country earlier in the year, usage of Bitcoin’s peer-to-peer trading in Nigeria has surged by 27%.
- Notably, in the past 85 days, Nigerians have moved about $103 million worth of Bitcoins on just Paxful and LocalBitcoins channels alone.
Crude oil price slumps
The price of Brent crude oil dipped by 1.88% to close at $65.32 on Wednesday, 21st April 2021.
- The decline in the price of crude was attributed to concerns that surging COVID-19 cases in India will drive down fuel demand in the world’s third-biggest oil importer.
- Meanwhile, data from the American Petroleum Institute revealed that U.S. crude oil stocks rose by 436,000 barrels in the week ended 16th April 2021.
- However, Libya’s National Oil Corporation declared force majeure on exports from the port of Hariga due to lack of maintenance funds, consequently shutting down several fields and bringing the country’s production to less than 1 million barrels per day.
- Brent Crude closed at $65.32 (-1.88%), WTI Crude closed at $61.17 indicating a 0.29% decline, while natural gas also grew by 0.26% to close at $2.699.
READ: Naira remains stable across forex market as dollar supply improves significantly by 430%
External reserve
Nigeria’s external reserve declined by 0.1% on Tuesday, 20th April 2021 to stand at $35.18 billion.
- According to data obtained from the Central Bank of Nigeria (CBN), Nigeria’s external reserve dipped further on Wednesday from $35.22 billion recorded as of 19th April 2021 to $35.18 billion on Tuesday.
- The second consecutive decline comes on the back of 19 successive growth recorded in Nigeria’s external reserve position.
- Meanwhile, the Central Bank of Nigeria has moved to improve dollar inflow into the country by assuring exporters that they will continue to have unrestrained access to their export proceeds.
- Governor Emefiele however, tasked exporters on repatriation of their export proceeds to improve foreign exchange inflows into Nigeria.
