Exchange rate weakens at NAFEX window as Naira settles at N410/$1

Friday 19th February 2021: The exchange rate between the Naira and the US Dollar closed at N410/$1 at the NAFEX window, where forex is traded officially.

Naira closed against the US Dollar at N410/$1, representing a 0.54% drop compared to N407.8/$1 recorded on Thursday 18th February 2021. This is the second time in the week that the exchange rate has closed at N410/$1 and the ninth consecutive trading day it closed over N400/$1.

Also, Naira depreciated at the parallel market to close at N478/$1 on Friday, 19th February 2021. This represents a N1 shortfall compared to N477/$1 recorded on the previous day.

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Trading at the official NAFEX window

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N410/$1 for the second time in the week. This represents a N2.2 drop when compared with the N407.8/$1 that it closed on the previous trading day.

The opening indicative rate closed at N407.61 to a dollar on Friday. This represents a 48 kobo drop when compared to N407.13 to a dollar that was recorded the previous trading day on Thursday, February 18, 2021.
An exchange rate of N424.15 to a dollar was the highest rate during intra-day trading before it closed at N410/$1. It also sold for as low as N390/$1 during intra-day trading.
It is also worth noting that throughout the week, the lowest rate during any inter-day trading was N390/$1.

However, forex turnover at the Investor and Exporters (I&E) window rose by 5.9% on Friday, February 19, 2021.
According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $62.69 million on Thursday, February 18, 2021, to $66.41 million on Friday, February 19, 2021.

READ: Why Nigerian stocks are getting pummeled

Cryptocurrency Watch

Bitcoin, the largest cryptocurrency in the world reached an all-time high on Sunday, 21st 2021 to stand at $58,022.48 as of 9:37 pm.

This is just two days after the world’s most demanded crypto-asset breached the $1 trillion market capitalisation to become the sixth most-valuable asset worldwide.
So far in the year, Bitcoin has gained 97.2% from $29,424.17 recorded as of 31st of December 2020.
Meanwhile, the richest man in the world, Elon Musk disclosed through his twitter handle that the price of the two leading cryptos seems to be in overbought territory.
However, popular American online financial advisory company, Motley Fool disclosed that it will be investing $5 million in Bitcoins in the coming weeks using the firm’s fund.

Oil price dips as Saudi Arabia moves to reverse oil production cut

Crude oil price (Brent crude) dipped on Friday, 19th February 2021 to close at $62.91.

Brent Crude oil price declined by 1.6% to close at $62.91 on Friday.
The decline in oil prices came on the back of Saudi Arabia’s move to increase oil output. According to reports during the week Saudi Arabia is poised to reverse its 1mbpd voluntary production cut in the coming weeks.
Also, about 4mb/d of US oil production was sidelined due to power outages and other equipment failures during the week, which include the damage of four of Texas’ largest oil refineries. A development that is expected to reduce crude oil demand.
Meanwhile, WTI closed at $59.24 (-2.12%), OPEC Basket gained 1.52% to close at $63.43, Bonny Light closed at $62.09 (-1.16%) while Natural gas dipped by 0.42% to settle at $3.069.

Dwindling external reserve

Nigeria’s external reserve dipped further by Thursday, 18th February 2021, to stand at $35.47 billion.
This represents a decline of 0.15% compared to $35.53 billion recorded as Wednesday, 17th February 2021.
Despite rallying oil prices, Nigeria’s external reserve has recorded a steady decline since 25th of January 2021, losing a sum of $958.1 million in less than a month.
It is worth noting that despite the significant increase recorded earlier in January, the current reserve positive is only $99.9 million more than $35.37 billion recorded as of 31st December 2020.