Thursday, 3rd June 2021: The exchange rate between the naira and the US dollar closed as at N410.9/$1 at the official Investors and Exporters window.
Naira appreciated against the US dollar on Thursday to close at N410.9 to a dollar, representing a 0.04 gain compared to N411.06/$1 recorded on Wednesday, 2nd June 2021.
On the other hand, naira depreciated against the US dollar on Thursday at the parallel market to close at N499 to a dollar. It fell from N498/$1 recorded on Wednesday, 2nd June 2021 to N499/$1 on Thursday.
Meanwhile, the Association of Bureau De Change Operators of Nigeria (ABCON) revealed that they will be commencing, what they called “Operation No Street Trading” to stop the hawking of foreign exchange by BDC operators.
This is part of the measures aimed at bringing down the exchange rate which has been on the rise recently, especially after the adoption of the NAFEX rate as the new official rate by the Central Bank of Nigeria.
Trading at the official NAFEX window
Naira appreciated against the US dollar at the I&E window on Thursday, 3rd June 2021 to close at N410.9/$1. This is 18 kobo higher than N411.06/$1 recorded on the previous day.
- The opening indicative rate also appreciated by 18 kobo to close at N411.04/$1 on Thursday, as against N411.22/$1 recorded on Wednesday 2nd June 2021.
- An exchange rate of N420.47 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.9/$1, while it also sold for as low as N400/$1 during intra-day trading.
- Forex turnover at the Investors and Exporters (I&E) window declined by 14.2% on Thursday, 4rd June 2021.
- Data tracked by Nairametrics from FMDQ revealed that forex turnover decreased from $164 million recorded on Wednesday, 2nd June 2021 to $140.76 million on Thursday, 3rd June 2021.
Cryptocurrency watch
The cryptocurrency market extended its gain from the previous day’s trade as it gained 3.69% to stand at $1.726 trillion on Thursday.
- This indicates that crypto investors gained $61.34 billion in a single day’s trade.
- Also, bitcoin rallied 3.49% to close at $38.89 billion as of 11:27pm on Thursday, Ethereum surged by 4.52% to close at $2,830.
- Meanwhile, a major financial institution, Standard Chartered is launching a cryptocurrency exchange and brokerage service, with the aim of giving its clients access to cryptocurrencies.
- The new exchange is said to be a joint venture between SC Ventures and BC Technology Group (0863.HK), a Hong Kong-based investment company specializing in digital assets.
Crude oil price
Crude oil prices have maintained their upward trend in recent times with Brent Crude trading at $71.31 per barrel.
- On Thursday, 3rd June 2021, Brent Crude oil recorded a marginal decline of 0.06% to close at $71.31 compared to $71.35 per barrel recorded the previous day.
- The continuous growth in the market is attributed to the recent EIA inventory report which states that crude oil inventories in the United States dropped about 5.1 million barrels last week.
- This varies slightly from the report released earlier by the American Petroleum Institute, which estimated crude oil inventory to have declined by 5.36 million barrels in the same period.
- Also, recall that the OPEC+ was the latest to signal strong optimism regarding demand as it confirmed it would stick to plans to relax production cuts further from next month.
- It is also worth noting that the world’s top exporter of oil, Suadi Arabia raised its official selling prices for Asia for July shipments on Tuesday. This was due to the rallying international oil prices. The Arab nation expects strong demand for its oil going forward.
- WTI grew 0.06% to trade at $68.85, while natural gas closed at $3.068, representing a 0.89% increase.
External reserve
Nigeria’s external reserve dropped by $9.96 million on Tuesday, 1st June 2021 to stand at $34.22 billion, representing a 0.03% decline when compared to $34.23 billion recorded on Monday, 31st May 2021.
- Nigeria’s foreign reserve has lost about $1.15 billion year-to-date, having recorded declines consecutively for 29 days.
- The current position also represents the lowest level in over one year. The last time Nigeria’s foreign reserve position was this low was 7th May 2021, when it stood at $31.19 billion.
- This is despite the positive growth recently recorded in the global crude oil market, as Bonny Light crude edges closer to the $70 per barrel mark.
- The decline is however attributed to decline in the value of crude oil export, due to the reduction in buying capacity of India, which is a major importer of Nigerian crude.
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