Monday,12th April 2021: The naira appreciated against the dollar at the parallel market on Monday, 12th April 2021 to close at N482 to a dollar. This represents a N3 gain when compared to the N485/$1 that was recorded on Friday, April 9, 2021.
Meanwhile, the exchange rate between Naira and the US Dollar closed at N409.75/1$ in the Importers and Exporters window, where forex is traded officially.
Naira depreciated against the US Dollar at the NAFEX window on Monday to close at N409.75/$1. This represents a 0.18% drop when compared to N409/$1 recorded on Friday, as the country’s external reserve increased by $620 million in 2 weeks.
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Trading at the official NAFEX window
Naira depreciated against the US Dollar at the Investors and Exporters window on Monday to close at N409.75 to a dollar. This represents a 75 kobo drop when compared to N409/$1 recorded on Friday, 9th April 2021.
- The opening indicative rate closed at N410.88 to a dollar on Monday. This represents a N1.09 drop when compared to N409.79/$1 recorded on Friday.
- Also, an exchange rate of N420 to a dollar was the highest rate recorded during intra-day trading before it closed at N409.75/$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 17.9% on Monday, 12th April 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined from $55.21 million recorded on Friday, April 9, 2021, to $45.35 million on Monday, April 12, 2021.
READ: Naira appreciates at NAFEX as Nigeria’s external reserve is set to get a boost
Cryptocurrency watch
The world’s most popular digital currency, bitcoin, rose by as much as 2.6% to $61,229 on Monday, nearing an all-time high as bullish sentiment gathered steam ahead of listing by the largest US cryptocurrency exchange.
- The cryptocurrency is up almost nine times in the past year, a return that towers above that of more familiar assets like equities or bullion.
- Against the backdrop of Wall Street’s growing embrace of crypto, the direct listing of digital-token exchange Coinbase Global Inc. is generating a lot of interest.
- Coinbase is moving towards a $100 billion valuation as it is due to go public on the Nasdaq on April 14, the first listing of its kind for a major cryptocurrency company and a test of investor appetite for other start-ups in the sector.
- The digital currency has been widely adopted by many, replacing gold as the global digital-reserve asset.
- Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance Coin, known as BNB, rose 23% on Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.
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Oil price gain
Brent crude oil price rose on Monday evening as it closed at $63.34 per barrel, indicating a 0.51% increase compared to $63.02 recorded at the close of trade on Sunday on expectations of strong economic recovery.
- Oil prices recorded an increase early on Monday, with WTI Crude topping $60 a barrel for the first time in a week after the Federal Reserve Chairman, Jerome Powell, said that the outlook on the U.S. economy had brightened substantially.
- A weaker U.S. dollar also added to investors’ appetite for crude, while another claim from the Yemeni rebel group, the Houthis that they had targeted oil facilities of Aramco in Saudi Arabia further supported prices.
- Saxo Bank analysts said that the prospect for stronger economic growth helped to offset the impact of a resurgent coronavirus just as OPEC+ prepares to ease production cuts.
- Brent Crude closed at $63.34 (+0.09%), WTI Crude closed at $59.75 indicating 0.08% gain, Bonny Light, $62.20 (+1.06%), OPEC Basket (-0.13%) to close at $61.14 while Natural gas dropped by 0.27% to close at $2.554.
External reserve
Nigeria’s external reserve gained $30 million on Friday, 9th April 2021 to close at $35.036 billion, being the highest external reserve position recorded in over a month.
- This indicates a 0.09% increase when compared to $35.006 billion recorded on Thursday, 8th April 2021.
- It also represents an increase in the country’s external reserve position for the 14th consecutive day, having endured a significant downturn earlier in the year. Nigeria’s reserve has added a total of about $620 million in 14 days.
- This recent increase in Nigeria’s external reserve could however be attributed to the increase in crude oil prices recorded earlier in March before the recent bearish trade in the crude market.
- It could be attributed to the possible increase in diaspora remittance as the CBN offers incentives for every unit of a dollar received in Nigeria from diaspora remittance.
- The external reserve is likely to get a further boost, as the Federal Government recently announced plans to issue $500 million Eurobonds for 2021.