Tuesday, 27th July 2021: The exchange rate between the naira and the US dollar closed at N411.67/$1 at the Investors and Exporters window, where forex is traded officially.
Naira depreciated against the US dollar to close at N411.67/$1 on Tuesday, representing a 0.04% depreciation compared to N411.5/$1 recorded on Monday, 26th July 2021. In the same vein, naira also depreciated at the parallel market to close at N505/$1 from N504 to a dollar recorded in the previous day.
The depreciation in the foreign exchange markets came after the CBN governor banned the supply of forex to BDC operators in the country, as a result of various infringements by the operators against Nigeria’s monetary policies.
Trading at the official NAFEX window
Naira depreciated against the US dollar at the Investors and Exporters window on Tuesday to close at N411.67/$1. This represents a 17 kobo depreciation when compared to N411.5/$1 recorded on Monday.
The opening indicative rate appreciated from N411.5/$1 recorded on Monday, 26th July 2021 to close at N411.67/$1 on Tuesday.
An exchange rate of N412.95 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.67/$1, while it sold for as low as N387.67/$1 during intra-day trading.
Meanwhile, forex turnover at the Investors and Exporters (I&E) window decreased by 17.1% on Tuesday, 27th July 2021 to $115.67 million.
According to data tracked by Nairametrics from FMDQ, forex turnover declined from $139.49 million recorded on Monday, 26th July 2021 to $115.67 million on Tuesday.
Bitcoin surged during the early hours of Wednesday to hit the $40,000 mark as Tesla’s Bitcoin holding reached $1.3 billion.
As of 6:40 am on Wednesday the flagship crypto-asset gained 1.84% to trade at $40,209, indicating a gain of about $713.51 as of the time of writing this article.
The rally recorded in Bitcoin also pushed the crypto market capitalisation up by $11.92 billion to $1.53 trillion.
The positive trend in the market could be attributed to the report from Tesla’s Q2 unaudited statement, which confirmed that the firm did not sell its Bitcoin holdings in Q2 2021.
Crude oil price
Brent Crude oil gained marginally on Tuesday to close at $74.53 per barrel and has set out on a positive note in the early hours of Wednesday, as it currently trades at $74.76, indicating a gain of 0.36%.
Also, WTI Crude has gained 0.49% as of 6:42 am to trade at $72, Bonny Light gained 0.22% to trade at $73.08, while natural gas dipped 0.55% to trade at $3.949.
The OPEC Basket surged by 4.43% to trade at $73.03 per barrel, representing a gain of $3.1.
The positive rally in the global crude oil market can be attributed to the report from the American Petroleum Institute (API) released on Tuesday, which revealed a draw in crude oil inventories of 4.73 million barrels for the previous week. This brings the total crude draw year-to-date to about 54 million barrels.
Nigeria’s external reserve gained $66.51 million on Monday, 26th July 2021 to close at $33.32 billion compared to $33.25 billion recorded as of Friday, 23rd July 2021.
Nigeria’s foreign reserve is now moving towards an upward trajectory having been under immense pressure in recent years from the impact of Covid-19, the drop in crude oil revenues and the decline in foreign inflows, diaspora remittances amongst others.
Meanwhile, the latest boost which has been sustained for seven days will come as good news for the Nigerian government and the Central Bank as the positive trend means increased forex and less pressure for Nigeria’s exchange rate.
The Monetary Policy Committee of the CBN noted funds could be sourced through the issuance of diaspora bonds which would help boost foreign exchange supply and ease the exchange rate pressure.