Wednesday, 11th August 2021: The exchange rate between the naira and the US dollar closed at N411.40/$1 at the official Investors and Exporters window.
Naira appreciated against the US dollar to close at N411.40/$1 on Wednesday, representing a 0.02% gain when compared to the N411.50/$1 that was recorded the previous day.
However, the naira depreciated at the parallel market to close at N515/$1 on Wednesday, August 11, 2021. This represents a N5 loss when compared to the N510/$1 that it traded the previous day.
The local currency is gradually reversing the gains it made recently at the black market due to demand pressure in the forex market.
The recent gains followed the crash in the exchange rate after the CBN announced the stoppage of sales of dollars to Bureau De Change operators.
Trading at the official I&E window
Naira appreciated against the US dollar at the Investors and Exporters window on Wednesday to close at N411.40/$1. This represents a 10 kobo gain when compared to the N411.50/$1 that was recorded on Tuesday, August 10, 2021.
The opening indicative rate closed at N411.50/$1 on Wednesday, 11th August 2021, representing a 13 kobo gain when compared to the N411.63/$1 that it closed at on Tuesday, 10th August 2021.
An exchange rate of N412.26 to a dollar was the highest rate recorded during intra-day trading, before it settled at N411.40/$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 rose by 8.08% on Wednesday, 11th August 2021.
According to data tracked by Nairametrics from the FMDQ, forex turnover increased from $122.52 million recorded on Tuesday, 10th August 2021 to $132.42 million on Wednesday, August 11, 2021.
Cryptocurrency watch
The world’s most popular and largest cryptocurrency, Bitcoin, was up by 0.38%, trading at $45,931.53 on Wednesday evening, as its comeback brings back the $100,000 predictions into focus.
Despite pulling back from recent highs, Bitcoin remains above a key long-term technical indicator, which reflects bullish market conditions.
The crypto is up 57% year to date and is making headway toward its all-time high of $64,829 on April 14.
The Chief Executive Officer of Australian crypto exchange BTC Markets, Caroline Bowler said that after a quiet July, we’re seeing a return of retail investors.
Daniel Kim, head of capital markets at Maple Finance pointed out that Ether and other assets are representing the majority in trading volume and not Bitcoin.
The second-largest cryptocurrency by market capitalization, Ethereum, was up by 1.69% on Wednesday evening to trade at $3,230 at the time of writing this report.
Crude oil price
Oil prices continued their rebound with Brent crude going up by 0.04% on Wednesday evening to trade at $71.47 per barrel as the Energy Information Administration (EIA) lowers oil production expectations for 2022.
EIA said that US crude oil production this year will average 11.1 million bpd and will rise to 11.8 million bpd in 2022.
The agency added that the most recent monthly data on production, from May, showed a daily average of 11.2 million, which the agency expects to remain relatively unchanged until about October when it would start rising.
The downward revision probably has to do with rising OPEC production, which the EIA now expects to reach 28.7 million bpd in 2022, from 26.5 million bpd this year with all the production cuts.
Goldman Sachs said that China’s oil demand is expected to be 1 million barrels per day (bpd) lower in the next 2 months than previously expected due to the rising number of COVID cases in the world’s top crude importer.
Meanwhile, the United States had called on the OPEC+ alliance to revive production more quickly.
WTI Crude was down by 0.01% on Wednesday evening to trade at $69.24 per barrel after rising earlier in the day, Natural gas recorded a 0.25% drop in price to trade at $4,049. Bonny Light was down by 1.28% to trade at $68.90 per barrel.
External reserve
Nigeria’s foreign reserve rose by $21 million on Tuesday, 10th August 2021 to close at $33.589 billion compared to $33.568 billion recorded as of 9th August 2021.
Since the reserve started moving positively, it has gained over $495.1 million in 28 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.
I confidently believe that government ease on COVID-19 restrictions in the Country will invite more foreign investment thereby reduce the hyperinflation of the naira and it’s gain against the dollar, thus leveraging marginalization for common grounds between local investors and foreign investors.