Tuesday, 3rd August 2021: The exchange rate between the naira and the US dollar closed at N411.50/$1 at the official Investors and Exporters window.
Naira remained stable against the US dollar to close at N411.50/$1 on Monday, the same rate when compared to N411.50/$1 recorded on the previous day.
Also, naira appreciated at the parallel market to close at N508/$1, having traded at N512/$1 the previous day. This represents a N4 gain when compared to the previous day’s rate.
READ: Three things that could make the naira great again
The naira is heading back to the level it was before the CBN’s sudden decision last week, to stop selling forex to Bureau De Change (BDC) operators.
There appears to be more clarity in the forex market over the CBN’s new policy on BDCs with currency speculators selling off their dollars as they record heavy losses.
Trading at the official I&E window
Naira remained stable against the US dollar at the Investors and Exporters window on Tuesday to close at N411.50/$1, this was the same rate when compared to N411.50/$1 recorded on Monday.
The opening indicative rate also remained stable to close at N411.50/$1 on Tuesday, 3rd August 2021, this was the same rate that it closed at on Monday, 2nd August 2021.
READ: Forex speculators to lose N100 billion as CBN sustains massive funding for BDCs
An exchange rate of N412.70 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.50/$1, while it sold for as low as N400/$1 during intra-day trading.
Meanwhile, forex turnover at the Investors and Exporters (I&E) window dropped by 19.6% on Tuesday, 3rd August 2021.
According to data tracked by Nairametrics from the FMDQ, forex turnover declined from $143.20 million recorded on Monday, 2nd August 2021 to $115.17 million on Tuesday, August 3, 2021.
READ: CBN and Nigerian banks battle currency speculators
Cryptocurrency watch
The world’s most popular and largest cryptocurrency, Bitcoin, dropped by 2.06% in the early hours of Wednesday to close at $37,869 as the recent rally begins to cool.
Bitcoin extended its pullback on Tuesday as buyers continue to take profits from the $40,000 resistance level and is down about 4% over the past week.
Ongoing regulatory concerns in the U.S. and China have kept some Bitcoin buyers on the sidelines, with lower support seen around $34,000 to $36,000.
READ: World Bank blames CBN for Nigeria’s FX crisis
Nevertheless, a significant amount of Bitcoin has flowed out of exchanges over the past week, which could indicate investors’ preference to hold rather than sell the crypto asset.
Coming off its best week in 3 months, Bitcoin is giving back some of its gains, with strategists flagging a drop below a key trendline that typically portends further weakness.
Meanwhile, Ether, the world’s second-largest cryptocurrency by market cap, has broken out of a two-month consolidation relative to Bitcoin.
Ethereum dropped by 1.68% to trade at $2,496.64.
Crude oil price
Crude oil prices continued their slide on Tuesday with the WTI falling below $70 per barrel on the global rise in Covid-19 cases.
The U.S benchmark, WTI Crude, slumped initially below $70 per barrel early on Tuesday before stabilizing at $70.41 on the second day of sell-offs triggered by surging Covid-19 cases globally, including the biggest economies like the United States and China.
The Brent crude was down 0.66% on Tuesday to close at $72.41 per barrel as the market participants were worried about what low crude import by China portends for the global oil demand.
Oil prices started August with a loss on Monday, plunging by over 3% as Delta variant cases in the world continue to climb. The Delta variant has spread to 32 Chinese provinces within the last two weeks, indicating a rapid spread.
The market tried to shake off Monday’s sell-off on Tuesday, but after a short-lived rebound, oil prices headed downwards again.
The WTI Crude dropped 0.20% on Tuesday evening to trade at $70.41 per barrel, Natural gas recorded a 0.94% gain in price to trade at $4,065. The Bonny Light was down by 3.40% to trade at $71.79 per barrel.
External reserve
Nigeria’s foreign reserve increased by $81 million on Monday, 2nd August 2021 to close at $33.484 billion compared to $33.403 billion recorded as of 30th July 2021.
Since the reserve started moving positively, it has gained over $390.1 million in just 20 days despite enduring a significant plunge in the previous months.
Recall that the Central Bank of Nigeria banned the sale of foreign exchange to Bureau De Change (BDC) operators in the country, due to reports of the operators’ illegal trading of the dollar, trading beyond the limit threshold of $5,000 and gradually dollarizing the Nigerian economy, according to the CBN governor.