Exchange rate gains at NAFEX window as dollar supply improves significantly
- 12th March 2021
- Posted by: Hakeem
- Category: Currencies
The exchange rate between the naira and the US Dollar closed at N409 to a dollar at the Investors and Exporters window.
Naira gained against the US Dollar on Thursday to close at N409/$1, representing a 0.52% gain when compared to N411.13/$1 recorded on Wednesday, 10th March 2021.
Also, Naira gained against the US Dollar in the parallel market, gaining N2 to close at N482 to a dollar compared to N484/$1 recorded on the previous day.
This came after the president of the Association of Bureau De Change Operators in Nigeria (ABCON), Aminu Gwadebe stated in a virtual meeting that the BDC’s will not allow forex speculators and street hawkers to take over BDC business in Nigeria through their illegal practices.
On the other hand, commercial banks in Nigeria have informed their customers that they can no longer make instant online transfers out of their domiciliary accounts without proper documentation.
Trading at the official NAFEX window
Naira gained against the US Dollar at the Investors and Exporters window on Thursday to close at N409 to a dollar. This represents a N2.13 kobo gain when compared to N411.13/$1 recorded on the previous trading day.
- The opening indicative rate closed at N409.66 to a dollar on Thursday. This represents a 69 kobo gain when compared to N410.35/$1 recorded on Wednesday.
- Also, an exchange rate of N415 to a dollar was the highest rate during intra-day trading before it closed at N409/$1. It also sold for as low as N390/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window jumped by 420.3%% on Thursday, 11th March 2021.
- A look at the data tracked by Bigwig FX from FMDQ, forex turnover increased from $36.92 million recorded on Wednesday, March 10, 2021, to $192.11 million on Thursday, March 11, 2021, being the highest dollar supply recorded in two weeks.
Bitcoin, the world’s most popular cryptocurrency, soared higher on Thursday to close at $57,749.67. This represents a 2.33% gain when compared to $56,432.01 recorded on the previous trading day.
- The recent increase can be attributed to JP Morgan Chase’s announcement that it had created a new debt instrument that provides selected investors with direct exposure to a basket of crypto-focused firms, which has been filed with the U.S Securities and Exchange Commission.
- Meanwhile, a fast-rising Crypto, Theta Fuel printed a 51.81% gain in a single day, trading at $0.286753 with a daily trading volume of about $378 million, according to a Bigwig fx article.
- On the other hand, data obtained from Onchain revealed that bitcoin exchange balances held on popular trading platforms have continued to deplete since October 2020.
- The analysis shows that popular trading exchanges like Coinbase, Binance, Huobi, and many other platforms have lost 20% of bitcoin balances during the last 12 months. This suggests that investors are accumulating, rather than selling the bitcoin on exchanges.
Oil prices rally high
Brent Crude oil on Thursday 11th March 2021 gained momentum as it rose by 2.55%% to close at $69.63, indicating a recovery from its slump recorded on Monday and Tuesday.
- The price of Brent Crude had topped $70 per barrel in the early hours of Monday this week before sliding down on account of the news of an attack by rebel Houthi rebel on the Saudi oil infrastructure on Sunday.
- The recent increase in oil price can be attributed to OPEC+’s decision to maintain the current production cuts for another month.
- According to the Foreign Minister of Saudi Arabia, Prince Faisal bin Farhan, while speaking after a meeting with his counterpart from Russia, Sergey Lavrov, the Organisation of Petroleum Exporting Countries is looking for a “fair” price for its crude.
- Afterward, Lavrov noted that the OPEC+ alliance was strong and there was nothing that could at this point undermine the good working relationship between Russia and Saudi Arabia.
- This is a strong indication that both parties are in synergy towards ensuring that Crude oil price continues its current bullish run.
- WTI Crude closed at $65.9 (-0.18%), OPEC Basket $65.6, Bonny Light $68.19 (+3.27%), and Natural Gas $2.672 (+0.15%).
External reserve continues its decline
Nigeria’s external reserve declined by 0.13% on Wednesday, 10th March 2021 to stand at $34.67 being a record low in 10 months.
- The country’s external reserve declined from $34.71 billion recorded as of Tuesday, 9th March 2021 to stand at $34.67 billion as of 10th March 2021.
- Nigeria’s current external reserve position indicates a total loss of $433.68 million in the month of March 2021.