Thursday, 12th August 2021: The exchange rate between the naira and the US dollar closed at N411.67/$1 at the official Investors and Exporters window.
Naira depreciated against the US dollar to close at N411.67/$1 on Wednesday, representing a 0.07% drop when compared to the N411.40/$1 that was recorded the previous day.
However, the naira remained stable at the parallel market to close at N515/$1 on Thursday, August 12, 2021. This was the same rate that it traded the previous day.
The local currency was weakened at the official market despite a 14.02% rise in dollar supply, as the Bankers Committee warned customers and bank staff against fraudulent practices in the forex market, with threats of sanctions and prosecutions.
Trading at the official I&E window
Naira depreciated against the US dollar at the Investors and Exporters window on Thursday to close at N411.67/$1. This represents a 27 kobo drop when compared to the N411.40/$1 that was recorded on Wednesday, August 11, 2021.
The opening indicative rate closed at N411.83/$1 on Thursday, 12th August 2021, representing a 33 kobo drop when compared to the N411.50/$1 that it closed at on Wednesday, 11th August 2021.
An exchange rate of N412.50 to a dollar was the highest rate recorded during intra-day trading, before it settled at N411.63/$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 14.02% on Thursday, 12th August 2021.
According to data tracked by Nairametrics from the FMDQ, forex turnover increased from $132.42 million recorded on Wednesday, 11th August 2021 to $150.99 million on Thursday, August 12, 2021.
Cryptocurrency watch
The world’s most popular and largest cryptocurrency, Bitcoin, dropped below the $45,000 mark, down by 2.49% to trade at $44,908.01, as analysts said that Bitcoin price needed a breather before chasing new heights.
The cryptocurrency sector is back in sight of a $2 trillion market value, a level last seen in May, but further gains face an obstacle from potential new U.S. tax reporting requirements.
Bitcoin’s price has added over 30% during the last month, though its rally has been outpaced by the Ethereum price, up almost 50% from this time in July.
This week, as part of its second-quarter results statement, major U.S. crypto exchange Coinbase revealed that Ethereum was the most traded cryptocurrency on the platform in the second quarter of the year, jumping ahead of Bitcoin for the first time.
The Ethereum price has soared over the last year, rising by over 700%. The second-largest cryptocurrency by market capitalization, Ethereum, was down by 4.02% on Thursday evening to trade at $3,108.32 at the time of writing this report.
Crude oil price
Oil prices’ rebound was cut short with Brent crude dropping by 0.46% on Thursday evening to trade at $70.98 per barrel, as oil traders assessed how the spreading delta variant would impact world fuel demand for the rest of the year.
Goldman Sachs Group Inc. sees the variant having a temporary impact on oil demand. However, the International Energy Agency cut its global oil consumption forecasts sharply for the rest of this year and predicted a new surplus in 2022.
OPEC said that global oil demand was expected to average 96.6 million barrels per day (bpd) this year and exceed 100 million bpd in the second half of 2022.
This keeps its estimates from a month ago unchanged, despite the Covid-19 resurgence in major economies, including China and the United States.
Over the last few months, a demand rebound in key economies such as the U.S. and Europe has helped to drain bloated stockpiles built up during the pandemic and driven prices higher.
However, the latest virus wave is an indication that a further recovery will be bumpy.
WTI Crude was down by 0.59% on Thursday evening to trade at $68.68 per barrel, Natural gas recorded a 0.38% drop in price to trade at $3,918. Bonny Light was up by 1.71% to trade at $70.08 per barrel.
External reserve
Nigeria’s foreign reserve dropped marginally by $3 million on Wednesday, 11th August 2021 to close at $33.586 billion compared to $33.589 billion recorded as of 11th August 2021.
Since the reserve started moving positively, it has gained over $492.1 million in 29 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.
