Wednesday, 24th March 2021, the exchange rate between the naira and the US Dollar closed at N408.75/$1 at the Investors and Exporters window.
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Naira gained against the US Dollar again on Wednesday to close at N408.75 to a dollar, representing a 0.26% gain compared to N409.8/$1 recorded on Tuesday.
However, in the parallel market, the naira remained relatively stable, as it closed at N486/$1, which is the same as recorded in the previous trading session.
Forex turnover increased marginally to $34.76 million, while Nigeria’s external reserve recorded the third consecutive increase, gaining $182.3 million in three days.
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 Wednesday to close at N408.75/$1. This represents a N1.05k gain when compared to N409.8/$1 recorded on Tuesday, 23rd March 2021.
- The opening indicative rate closed at N408.98 to a dollar on Wednesday. This represents an 80 kobo gain when compared to N409.78/$1 recorded on Tuesday.
- Also, an exchange rate of N414 to a dollar was the highest rate recorded during intra-day trading before it closed at N408.75/$1. This represents the highest rate recorded in almost two weeks.
- It also sold for as low as N394/$1 during intra-day trading. A difference of N1 compared to N393 recorded in the previous day
- Forex turnover at the Investor and Exporters (I&E) window increased marginally by 5% on Wednesday, 24th March 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $33.11 million recorded on Tuesday, March 23, 2021, to $34.76 million on Wednesday.
READ: Best performing Industrial and consumer goods stocks from last week
Cryptocurrency watch
Bitcoin, the most priced and popular cryptocurrency in the world slumped by over 4.06% to trade at $52,153.23 on Wednesday.
- The highly coveted digital currency lost about $2,208.34 in value, representing a decline of 4.06% in a single day.
- Ethereum also dipped by 5.75% on Wednesday to trade at $1,574.2 as of 11:52 pm on Wednesday.
- This came on the back of Jerome Powell’s comment on the risk attached to investing in bitcoins and other digital assets.
- Jerome Powell, who is the Chairman of US Federal Reserve had said the volatility of the crypto coins undermines their ability to store value, which is a basic function of money. He went further to state that bitcoin is not really useful as a store of value.
- Meanwhile, JMP Securities has predicted that “$1.5 trillion of incremental capital” could flow into bitcoin, an amount greater than the cryptocurrency’s current market cap.
- The firm sees more wealth management companies following Morgan Stanley’s example to offer bitcoin to their clients. “Around $30 trillion of assets in the U.S. retail wealth management industry currently do not have direct access to bitcoin
READ: U.S government set to auction Bitcoins within a few days
Brent Crude makes a rebound
Brent Crude oil gained $3.62 in Wednesday trade to close at $64.41 per barrel, representing a 5.95% gain in a single day after enduring a massive decline in the previous day.
- Oil prices had dropped as investors’ sentiments towards the resurgence of the covid pandemic increase and major European countries effect new lockdowns and others extend their lockdown.
- It is worth noting that Bonny Light gained 2.67% to close at $62.58 per barrel while WTI dipped 0.88%
- WTI closed at $60.64 (-0.88%), Brent Crude ($64.41), Bonny Light ($62.58), OPEC Basket ($62.27), and Natural gas ($2.497).
- Meanwhile, analysts believe that the OPEC+ will likely decide to keep oil production steady for another month.
READ: U.S Government to unveil Crypto nemesis before end of July
External reserve gains $182.3 million three days
Nigeria’s external reserve increased by 0.08% on Tuesday, 23rd March 2021 to stand at $34.6 billion.
- This represents the third consecutive increase in three days, gaining a total of $182.27 million from $34.42 billion recorded as of March 18, 2021 to $34.6 billion as of 23rd March 2021.
- Nigeria’s reserve had lost $957.26 million year-to-date before recording increases in the past three days, which could be attributed to the recent gain in the global crude oil market.
- Nigeria will hope to continue in this trajectory, as the increase in foreign reserves indicates more foreign exchange to meet up with the nation’s demand.
