Connect with us
deals book
Advertisement
Polaris bank
Advertisement
Oando
Advertisement
Alpha
Advertisement
Hotflex
Advertisement
Binance
Advertisement
Advertisement
UBA
Advertisement
Patricia
Advertisement
Access bank
Advertisement
app

Currencies

Exchange rate gains at NAFEX window as Goldman Sachs predicts oil price at $80

Naira appreciated further on Friday at the NAFEX window to close at N410 to a dollar.

Published

on

FOREX, Dollar scarcity worsens as exchange rate falls to N472/$1 at black market , Naira falls to N460/$1 as CBN intervention fails to contain speculation

On Friday, 30th April 2021: The exchange rate between naira and the US dollar closed at N410/$1 at the Importers and Exporters window.

Naira appreciated further on Friday at the NAFEX window to close at N410 to a dollar. This represents a N1 gain when compared to N411/$1 recorded on Thursday, 29th April 2021.

On the other hand, naira maintained stability at the parallel market to close at N485/$1, while forex turnover dipped by 48.6% from $110.46 million recorded on Thursday to $56.81 million on Friday, 30th April 2021.

Meanwhile, bitcoin gained 2.54% in the early hours of Monday as it traded for $58,060 as at 4:42 am on Monday, while the total crypto market capitalisation has gained to stand at$2.21 trillion.

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters window on Friday to close at N410/$1, representing a N1 gain when compared to the N411/$1 that was recorded on Thursday.

  • The opening indicative rate closed at N410.13 to a dollar on Friday, 30th April 2021, representing a 33 kobo drop when compared to the N410.46/$1 that was recorded on Thursday.
  • Also, an exchange rate of N429.13 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 N395/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window declined significantly by 48.6% on Friday, 30th April 2021.
  • Data tracked by Nairametrics from FMDQ showed that forex turnover reduced from $110.46 million recorded on Thursday, 29th April 2021, to $56.81 million on Friday, April 30, 2021.

Cryptocurrency watch

The world most popular digital currency on Sunday, 2nd May 2021 dipped by 2.16% to trade at $56,601 having lost $1,250 during intra-day trading.

  • This came after the Vice-Chairman of Berkshire Hathaway, Charlie Munger expressed disdain towards the most priced cryptocurrency.
  • According to a report from CNBC, Munger stated that: “I think I should say modestly that the whole damn development is disgusting and contrary to the interests of civilisation.”
  • Meanwhile, Visa during its earnings call for the period ended March 31st, 2021 expressed its commitment to the crypto space and revealed that the company considers two market segments in the crypto space.
  • Bitcoin is one of them, which he described as “primarily” an asset held by people. “We kind of think of them as the digital gold,” he continued. “Then there are digital currencies, including central bank digital currencies [CBDCs] and stablecoins that are directly backed by existing fiat currencies.”
  • However, bitcoin gain 2.54% in the early hours of Monday as it traded at $58,060 at 4:42 am on Monday, while the total crypto market capitalisation has gained to stand at $2.21 trillion.

Crude oil price

The price of Brent Crude oil gained marginally by 0.09% on Sunday, 2nd May 2021 to close at $66.82.

  • This came on the heels of a boost recorded last week as Brent Crude traded for over $68 per barrel before settling below $67 in the weekend.
  • Oil prices have resumed their bearish run in the early hours of Monday. At the time of writing this article, Brent was trading at $66.66, while WTI was trading at $63.53.
  • Oil prices got a major boost last week, thanks to optimistic expectations about demand from OPEC+ and rebalancing fuel inventories in the United States.
  • Meanwhile, Goldman Sachs expects global oil demand to realise the biggest jump ever, in the next six months, maintaining its bullish forecast for oil prices.
  • Goldman Sachs continues to see oil rising to $80 per barrel this summer and says that: “The magnitude of the coming change in the volume of demand — a change which supply cannot match — must not be understated.”

External reserve

Nigeria’s external reserve dipped by 0.09% on Thursday, 29th April 2021 to close at $34.91 billion from $34.94 billion recorded the previous day.

  • The recent decline indicates that a sum of $345.83 million has been lost in external reserve in the past nine days.
  • According to data tracked from the website of the Central Bank of Nigeria, this represents the ninth consecutive decrease recorded in Nigeria’s external reserve position.
  • The persistent decline can however be attributed to low liquidity and pressure in the foreign exchange market.

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Currencies

Naira falls against US dollar as CBN extends Naira4dollar scheme indefinitely

The exchange rate between the naira and the US dollar, closed at N411/$1 at the I&E Window.

Published

on

Thursday, 6th May 2021: The exchange rate between the naira and the US dollar, closed at N411/$1 at the Importers and Exporters window, where forex is traded officially.

Naira fell against the US dollar to close at N411 to a dollar on Thursday, 6th May 2021, representing a 50 kobo decline when compared to N410.5/$1 that was recorded on Wednesday, 5th May 2021.

Meanwhile, the naira maintained stability at the parallel market as it closed at N485/$1, while Nigeria’s external reserve plunged $28.94 million to close at $34.76 billion on Wednesday, 5th May 2021.

Also, the apex bank issued an indefinite extension to its Naira4dollar scheme for foreign remittances, which was introduced some months ago. This is aimed at sustaining the country’s foreign exchange market liquidity.

READ: Naira gains at NAFEX window as dollar supply improves by 305%

Trading at the official NAFEX window

The naira depreciated against the US dollar at the Investors and Exporters window on Thursday to close at N411/$1, representing a 50 kobo decline when compared to the N410.5/$1 that was recorded on Wednesday.

  • The opening indicative rate closed at N410.37 to a dollar on Thursday, 6th May 2021, representing a 12 kobo depreciation when compared to the N410.25/$1 recorded on Wednesday.
  • Also, an exchange rate of N420.9 to a dollar was the highest rate recorded during intra-day trading before it settled at N411/$1. It, however, sold for as low as N400/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window declined by 38.4% on Thursday, 6th May 2021.
  • A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover decreased from $172.52 million recorded on Wednesday, 5th May 2021 to $106.34 million on Thursday, 6th May 2021.

READ: Exchange rate depreciates at NAFEX window as Bitcoin slumps by over 5%

Cryptocurrency watch

Bitcoin, the world’s most popular cryptocurrency, slumped by 2% on Thursday to trade at $56,358.03.

  • As of 11:31 pm on Thursday, the highly valued cryptocurrency asset witnessed a decline despite soaring as high as 5.5% on Wednesday.
  • However, Ethereum recorded a marginal growth of 0.07% to close at $3,530.75, capitalising on the 9.1% gain recorded in the previous day.
  • The total crypto market capitalisation depreciated by 0.53% to close at $2.33 trillion on Thursday.
  • Meanwhile, payments giant, Visa and financial services provider TALA have partnered to boost cryptocurrency adoption in emerging markets.
  • This partnership is aimed at easing the process of converting, storing and using cryptocurrencies by the underbanked consumers.

READ: Naira depreciates as dollar sales top $100m a day at I&E window

Crude oil price stalls

Crude oil prices witnessed a bearish trading session on Thursday, 6th May 2021 as the oil price rally stalled due to the worsening covid-19 crisis in India.

  • Brent Crude dipped by 0.97% on Thursday to close at $68.29 compared to its closing price of $68.96 recorded at Wednesday’s trading session.
  • The decline in oil prices, which cut short the rally to $70 a barrel was due to a fresh record of new daily coronavirus cases reported by the third-largest importer of oil in the world.
  • Also, according to energy analytics firm OilX, China’s crude oil imports fell by 11% in April 2021 to stand at 10.41 million barrels per day.

External reserve

Nigeria’s external reserve plunged for the 12th consecutive day on Wednesday, 5th May 2021 as it dipped $28.91 million to close at $34.76 billion.

  • The nation’s foreign reserve declined from $34.79 billion recorded as of Tuesday, 4th May 2021 to $34.76 billion on Wednesday, representing a 0.28% decline.
  • Nigeria’s foreign reserve has dipped $497.36 million since 16th April 2021 to date.
  • Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN intensified effort to encourage dollar remittances into the country.

Continue Reading

Currencies

How rise in oil prices will impact exchange rate

Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

Published

on

Crude oil prices rebound ease investors’ concerns for Nigeria debt market, How substantial is compliance for the Oil market?, Crude Oil price soars high on new COVID-19 vaccine

Nigeria, Africa’s top oil producer and home to the second-largest reserves on the continent, is expected to benefit from the rise in oil prices in many ways.

Oil prices are currently inching closer to $70 per barrel as the positive outlook of a return to global economic recovery swells investor sentiments.

Historically, there has been a strong positive correlation between crude oil prices and the performance of the Nigerian economy. For example, when oil prices plummeted due to the COVID-19 outbreak and the implementation of lockdown protocols in 2020, the Nigerian government scaled down the budget to align better with the drop in crude oil price.

Now that there is a surge in oil price, we should expect that there would be an increase in government revenue translating to a stirring-up of aggregate demand.

READ: Nigeria records highest trade deficit since 1981

Why oil price is rising

The OPEC+ output restrains, despite the strong recovery of oil consumption, continues to give formidable fitting to bullish sentiments about soaring oil prices.

  • Oil prices are rising as optimism about a strong rebound in fuel demand in developed countries overshadows concerns of full lockdown to curb covid-19 in India.
  • Oil (BRENT) has seen a 34.3% increase Year to Date with the oil price at $69.34 showing an increase of +1.15% as of the time of writing this article.

What it means for the exchange rate

Perhaps the greatest benefit of the recent oil price rise is exchange rate stability. Since the crash in oil prices began in late 2019, Nigeria’s official currency has faced a barrage of sell pressure as local and foreign investors increase demand for the dollar.

This forced the central bank to curtain demand, implementing various forms of capital controls across the economy. With oil prices on the rise, Nigerians can begin to expect the following:

Hotflex
  • An increase in government revenue, which also means higher dollar earnings and thus increased FX reserves. Nigeria’s FX reserve reportedly stands at $34.7 billion as of Tuesday, May 4th, 2021. Soaring oil prices strengthen the exchange rate and promote economic growth. This effect trickles down to higher reserves held by the CBN meant for stabilization of the currency.
  • Higher oil prices could also mean a more stable economy thus propelling economic growth. This, in turn, attracts foreign investor dollars or at least retains what we already have and reduces the pressure on demand.
  • Nigerians have intensified diversifying their currency holdings, keeping less of naira and holding more dollars as they hedge against depreciation. This has kept the pressure on the exchange rate over the last one and a half years. This trend could reverse if oil prices continue their steady rise.

READ: Dangote: Cement price from our factories is between N2,450 and N2,510 per bag, VAT inclusive

The implication? The parallel market exchange rate might appreciate closer to the NAFEX rate if this trend continues.

Hence, it is safe to presume that as the world resume business and travel activities, the demand for Black Gold will continue to increase, and with supply held steady by OPEC+ we can speculate that this is enough catalyst to relieve the pressure of FX demand and increase our foreign reserves thereby propelling growth.

However, the inclusivity of this growth may still be in question.

Continue Reading

  





Nairametrics | Company Earnings

Access our Live Feed portal for the latest company earnings as they drop.