Exchange rate falls to N500/$1 at black market as forex speculators intensify their activities
- 22nd June 2021
- Posted by: Hakeem
- Category: Currencies
Monday, 21st June 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 on Monday against the US dollar to close at N411.67 to a dollar compared to N411/$1 recorded on Friday, 18th June 2021.
Also, the exchange rate depreciated at the parallel market to close at N500/$1 on Monday, June 21, 2021. This represents a N2 drop when compared to the N498/$1 that was recorded on Friday, June 18, 2021.
The drop in the value of the naira at the black market continued due to activities of speculators and lower liquidity at the forex market.
Trading at the official NAFEX window
Naira depreciated against the US dollar at the Investors and Exporters window on Monday to close at N411.67/$1, representing a 67 kobo drop when compared to the N411/$1 that was recorded the previous day.
- The opening indicative rate closed at N411.04 to a dollar on Monday, 21st June 2021, representing a 54 kobo gain when compared to the N411.58/$1 recorded on Friday, 18th June 2021.
- Also, an exchange rate of N420.88/$1 was the highest rate recorded during intra-day trading, before it settled at N411.67/$1. It also sold for as low as N400/$1 during intra-day trading.
- Forex turnover at the Investors and Exporters (I&E) window dropped by 33.5% on Monday, 21st June 2021.
- Data tracked by Bigwig FX from the FMDQ showed that forex turnover declined from $141.58 million recorded on Friday, 18th June 2021 to $94.17 million on Monday, 21st June 2021.
The world’s largest and most popular cryptocurrency, Bitcoin, continued its drop as it declined by a further 6.50% to close at $32,726.47 on Monday evening, marking the lowest level in nearly 2 weeks amid an intensifying cryptocurrency crackdown in China.
- The crypto market was deeply in the red on Monday, extending a sell-off that began late last week and gathered pace over the weekend.
- As of Monday morning, other major tokens were also in the red, with Ethereum down 7.7% to $1,930 and XRP down 8.1% to $0.66. Dogecoin, the joke token propelled into the mainstream earlier this year, was down 18.1% to $0.21.
- By Monday morning, the entire crypto market had lost 6.6% of its value over the previous 24 hours, according to data provider CoinMarketCap.
- Earlier on Monday, the Peoples Bank of China said major financial institutions must stop providing trading, clearing and settlement for crypto transactions.
- The second-largest cryptocurrency by market value, Ethereum was down by 10.06% on Monday evening to close at $1,963.91.
Crude oil price continued its rally as it rose on Monday with the Brent Crude closing at $75.17 per barrel as sources from OPEC said that US shale producers were not expected to significantly raise crude production this year, despite higher oil prices.
- Brent crude oil rose by 0.33% as of Monday evening, 21st June 2021 to close at $75.17 per barrel.
- OPEC has solid reasons to believe that its control over the global oil supply will not be ruined by a surge in US crude oil production.
- The ongoing restraint in drilling activity in the shale patch would make the efforts of OPEC and its allies in the OPEC+ group to manage supply to the market this year a much easier task.
- Last week, OPEC+ was reportedly told by major international forecasters — including the Energy Information Administration (EIA), the International Energy Agency (IEA), Wood Mackenzie, IHS, Argus Media, Energy Intelligence, and Energy Aspects — that U.S. crude oil production would grow by just 200,000 barrels per day (BPD) this year.
- WTI Crude declined by 0.03% to close at $73.64, Bonny Light gained 0.93% to close at $73.72 per barrel, OPEC Basket recorded a 1.01% drop to close at $71.56, while Natural Gas was up by 0.25% to close at $3.199.
Nigeria’s external reserve continued its slide on Friday, 18th June 2021 as it dropped by $31 million to close at $33.763 billion.
- This represents a 0.09% decline compared to $33.794 billion recorded on Thursday, 17th June 2021.
- A total of $1.611 billion has been lost in reserves year-to-date, while month-to-date loss stands at $405.33 million.
- Nigeria’s forex reserve continues to trend downwards despite the positive rally recorded in the global crude oil market, with Brent crude currently trading at $75.17 per barrel.
- It is worth noting that India’s oil imports have started recovering after months of lessened activities due to the covid-19 pandemic’s effect on the country’s economy.