NAIRA falls against US dollar at the NAFEX window as bitcoin continues losing streak

Tuesday, 18th May 2021: The exchange rate between the naira and the US dollar closed at N411.63/$1 at the Importers and Exporters window, where forex is traded officially.

Naira depreciated against the US dollar on Tuesday to close at N411.63 to a dollar compared to N411.5/$1 recorded on Monday, 17th May 2021. This represents a 0.03% decline against the US dollar.

At the parallel market, the naira remained stable as it closed at N484/$1, which was the same as recorded on Monday. Meanwhile, forex turnover recorded a 47.2% decline, as only $58.88 million was traded at the NAFEX window as against $111.53 million recorded on Monday.

Trading at the official NAFEX window

The naira depreciated against the US dollar at the Investors and Exporters window on Tuesday to close at N411.63/$1, representing a 13 kobo decline when compared to the N411.5/$1 that was recorded on Monday.

• The opening indicative rate slumped by 43 kobo to close at N410.71 to a dollar on Tuesday, 18th May 2021, as against N410.28/$1 recorded on Monday.
• An exchange rate of N425.92 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.63/$1. It also sold for as low as 401.1/$1 during intra-day trading, a downtrend when compared to N395/$1 recorded on the previous day.
• Forex turnover at the Investors and Exporters (I&E) window declined further by 47.2% on Tuesday, 18th May 2021.
• Data tracked by Nairametrics from FMDQ revealed that forex turnover decreased from $111.53 million recorded on Monday, 17th May 2021 to $58.88 million on Tuesday, 18th May 2021.

Cryptocurrency watch

Bitcoin suffered a further decline on Tuesday, 18th May 2021, recording a decline of 0.91% to close at $43,196.39.

• The highly popular crypto asset continued in its downturn, which was triggered by Elon Musk’s tweets.
• On the other hand, Ethereum gained significantly as it closed at $3,414.48 on Tuesday, representing a 4.06% increase compared to $3,281.32 recorded on the previous day’s trade.
• China’s financial industry bodies namely, the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, declared on Tuesday that financial and payment institutions must not conduct cryptocurrency-related businesses.

Crude oil prices dip marginally

Crude oil prices recorded a decline on Tuesday, as Brent Crude dipped 1.08% to close at $68.71 per barrel.

• Brent Crude had hit $70 earlier on Tuesday, reaching the highest level in two months before pulling back to settle at $68.71.
• The increase was attributed to the general belief that economic activities would be revived all around the world, coupled with the oil demand recovery.
• Meanwhile, Royal Dutch Shell has revealed that it does not see its upstream oil operations in Nigeria as compatible with its strategy to become a net-zero energy business.
• The CEO, Ben Van Beurden, stated that the balance of risks and rewards associated with the company’s onshore portfolio was no longer compatible with the company’s strategic ambitions.
• Brent Crude dipped by 1.08% to close at $68.71 per barrel, OPEC Basket grew by 2.06% to close at $67.52, while Bonny Light gained 0.35% to close at N68.22/$.

External reserve

Nigeria’s external reserve plunged further by $74.9 million on Monday, 17th May 2021 to stand at $34.43 billion.

• The nation’s foreign reserve declined from $34.51 billion recorded as of Friday, 14th May 2021 to $34.43 billion on Monday, representing a 0.22% decline.
• Nigeria’s foreign reserve has dipped by $823.93 million since 16th April 2021 to date, while year-to-date, the country’s reserve has dipped by about $942.89 million.
• The recurrent decline in external reserve continues despite the recent increases recorded in the crude oil market and the continued effort by the apex bank to increase dollar inflow into the country.
• Notably, earlier in May, the Central Bank declared the indefinite continuation of the “Naira4dollar” scheme, which was originally set to end on 8th May 2021.