Currencies
Naira gains at NAFEX window despite low liquidity in forex market
The naira appreciated against the US Dollar at the Investors and Exporters window on Monday to close at N409.13/$1.
Monday, 29th March 2021, the exchange rate between the naira and the US Dollar closed at N409.13/$1 at the Investors and Exporters window.
Naira appreciated against the US Dollar on Monday, 29th March 2021 after gaining for 2 consecutive days at the NAFEX window to close at N409.13 to a dollar despite very low dollar supply.
This represents a 0.21% gain, when compared to N410/$1 recorded on Friday, 26th March 2021.
However, the naira remained stable at the parallel market, as it closed at N485/$1, this was the same rate that was recorded on the previous trading day.
READ: Naira gains at NAFEX window as external reserve plunges $1.1 billion in less than a month
Trading at the official NAFEX window
Naira appreciated against the US Dollar at the Investors and Exporters window on Monday to close at N409.13/$1. This represents an 87 kobo gain when compared to N410/$1 recorded on Friday, 26th March 2021.
- The opening indicative rate remained stable to close at N409.17 to a dollar on Monday. This was the same rate that was recorded on Friday.
- Also, an exchange rate of N410.50 to a dollar was the highest rate recorded during intra-day trading before it closed at N409.13/$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 57.4% on Monday, 29th March 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined from $72.43 million recorded on Friday, March 26, 2021, to $30.84 million on Monday.
READ: Naira 4 Dollar: Nigerians in diaspora remit $40 million in one week
Cryptocurrency watch
Bitcoin, the most priced and popular cryptocurrency in the world gained 3.22% on Monday evening to trade above $57,623 following more news of potential mainstream financial adoption of cryptocurrencies by major players.
- Visa had said it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.
- Ethereum also gained 7.29% to trade at $1,815.13 as of Monday night.
- Large firms including Mastercard, Paypal and BlackRock have started using some digital coins in recent months.
- Currency watchers have speculated that this is part of the reason for Bitcoin’s recent meteoric rise.
READ: Computers might steal Satoshi Nakamoto’s Bitcoin fortune
Oil price rebound continues
Oil price increase continued on Monday with the focus moving towards OPEC+ meeting.
- Brent Crude as of Monday evening traded at $65.07 per barrel as OPEC+ is scheduled to hold a meeting this week to decide on its output policy for May.
- While multiple factors may impact the group’s decision, the markets already priced in an expected rollover of current cuts through May.
- The closure of the Suez Canal led to a moderate price rally last week, which came after a significant decline in oil prices triggered by new and stringent lockdowns in Europe.
- The impact of the Suez Canal crisis on oil markets has been marginal due to a number of factors which include: slowing demand especially in the EU, relatively high inventory figures and the low volumes of crude oil passing through the canal (less than 5% of global supply).
- Brent crude gained about 0.77% during intra-day trading on Monday while WTI Crude rose by 0.97% during the same period.
- Brent ($65.07), WTI crude ($61.56), Bonny Light ($63.00), OPEC Basket ($62.56), and Natural Gas ($2.586).
READ: Naira falls at NAFEX window as oil prices rally above $60 and bitcoins blast past $44k
External reserve increase continues for the 5th consecutive day
Nigeria’s external reserve increased by 0.06% on Friday 26th, March 2021 to stand at $34.67 billion.
- This represents the sixth consecutive day increase, gaining a total of $230 million from $34.42 billion recorded as of March 18, 2021, to $34.67 billion as of 26th March 2021.
- Nigeria’s reserve had lost about $980 million year-to-date before recording increases in the past six days, which indicates that the recent oil price rally is beginning to reflect in the country’s external reserve.
- It is important for Nigeria that the increase continues as it will help the Central Bank stabilise the exchange rate against other currencies and meet up with pent-up obligations due to the lockdown embarked on in 2020.
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.
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