Monday, 7th June 2021: The exchange rate between the naira and the US dollar closed at N411.07/$1 at the official Investors and Exporters window.
Naira depreciated against the US dollar on Monday to close at N411.07 to a dollar, representing a 0.08% loss compared to N410.75/$1 recorded on Friday, 4th June 2021.
However, the naira remained stable against the US dollar on Monday at the parallel market to close at N502 to a dollar. This was the same rate that was recorded on Friday, June 4, 2021.
The dollar supply dropped by 34.5% as the Central Bank of Nigeria announced an increase of forex allocation to deposit money banks for SMEs, travellers, and others, in order to boost liquidity.
Trading at the official NAFEX window
Naira depreciated against the US dollar at the I&E window on Monday, June 7, 2021, to close at N411.07/$1. This represents a 32 kobo drop when compared with the N410.75/$1 recorded the previous day.
- The opening indicative rate closed at N411.08/$1 on Monday, representing a 4 kobo gain when compared with the N411.12/$1 recorded on Friday, 4th June 2021.
- An exchange rate of N420.73 to a dollar was the highest rate recorded during intra-day trading before it closed at N411.07/$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 dropped by 34.45% on Monday, June 7, 2021.
- Data tracked by Nairametrics from FMDQ revealed that forex turnover declined from $230.93 million recorded on Friday, 4th June 2021 to $151.37 million on Monday, 7th June 2021.
Cryptocurrency watch
The world’s biggest and most popular cryptocurrency, Bitcoin, declined by 0.51% on Monday evening to close at $35,609.16 as it failed to sustain an upward movement.
- Troy Gayeski, co-chief investment officer and senior portfolio manager at SkyBridge Capital, says Bitcoin is a very strong choice for investors as global central banks remain in a debasement period for their currencies.
- Bitcoin experienced some volatility last week, moving from a low of $34,153 to a high of $39,476.
- Also, Bitcoin struggled to rise as US Treasury Secretary, Janet Yellen, kept the market from cheering El Salvador’s plans to adopt the leading cryptocurrency as legal tender over her comments on interest rate hike.
- Ethereum rose by 1.05% on Monday evening to close at $2,717.05.
Crude oil price
Crude oil declined alongside a broader market sell-off, with prices losing some momentum after hitting $70 a barrel in New York for the first time in over 2 years.
- Brent Crude recorded a decline of 0.53% on Monday evening June 7, 2021, to close at $71.51.
- The US benchmark crude futures were largely weaker on Monday after failing to sustain a move beyond the psychological $70-a-barrel level.
- Chinese oil imports, a major reason behind this year’s rally, fell to a 5-month low in May as private refiners held back on purchases amid scrutiny of government-issued purchases quotas.
- Vitol’s head of operations for Asia, Mike Muller was quoted to have said that OPEC+ was gaining the upper hand as a trendsetter on global oil markets with a perception in the market that control was with the cartel.
- A robust rebound from the pandemic in the U.S., China and Europe has driven prices more than 40% higher this year, although the Covid-19 comeback across Asia is a reminder that the recovery will be uneven.
- WTI dropped by 0.59% to close at $69.18, the Bonny light crude rose by 1.39% to close at $70.99, the OPEC basket rose by 0.46% to close at $70.21 while natural gas closed at $3.081, representing a 0.52% drop.
External reserve
Nigeria’s external reserve continued to decline, as it dropped by $21 million on Monday, 7th June 2021 to close at $34.170 billion, representing a 0.06% decline when compared to $34.191 billion recorded on Friday, June 4, 2021.
- Nigeria’s foreign reserve has lost about $1.199 billion year-to-date, having recorded declines consecutively for 31 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.
- The decline persists despite the increase in global crude oil prices.
- The decline can be attributed to a drop in crude oil export arising from the reduction in the purchase of Nigeria’s crude oil by India, a major importer of Nigerian crude and a nation currently burdened by a second wave of the covid-19 pandemic.
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