Naira falls at NAFEX window as dollar supply drops significantly by 78%
- 11th May 2021
- Posted by: Hakeem
- Category: Currencies
Monday, 10th May 2021: The exchange rate between the naira and the US dollar closed at N410.67/$1 at the Importers and Exporters window, where forex is traded officially.
Naira depreciated against the US dollar to close at N410.67 to a dollar on Monday, 10th May 2021, representing a 34 kobo drop when compared to N410.33/$1 that was recorded on Friday, 7th May 2021.
Meanwhile, the naira remained stable at the parallel market as it closed at N483/$1. This was the same rate that was recorded on Friday, May 7, 2021, as the dollar supply dropped significantly by 77.7%.
Trading at the official NAFEX window
The naira depreciated against the US dollar at the Investors and Exporters window on Monday to close at N410.67/$1, representing a 34 kobo drop when compared to the N410.33/$1 that was recorded on Friday.
- The opening indicative rate closed at N410.22 to a dollar on Monday, 10th May 2021, representing a 12 kobo gain when compared to the N410.34/$1 recorded on Friday.
- Also, an exchange rate of N422 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.67/$1. It, however, sold for as low as N400/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window dropped significantly by 77.7% on Monday, 10th May 2021.
- A cursory look at the data tracked by Bigwig FX from FMDQ showed that forex turnover declined massively from $146.52 million recorded on Friday, 7th May 2021 to $32.61 million on Monday, 8th May 2021.
Bitcoin, the world’s most popular cryptocurrency, slumped by 5.29% as of Monday evening to trade at $55,682.55.
- The world’s largest cryptocurrency continues to trade much lower than April’s high of $65,000, which came in anticipation of Coinbase’s direct listing on Nasdaq.
- While Bitcoin has remained relatively stable, the altcoin market has flourished with the likes of Ethereum more than doubling in 16 days.
- Recently, American multinational investment bank Morgan Stanley began offering BTC custody to clients. Goldman Sachs also recently announced that clients would be able to invest in Bitcoin.
- Ethereum, the world’s second-largest cryptocurrency, surges above $4,000 for the first time ever as it traded at $4,213.46 before slumping to $3,897.09.
Crude oil price stalls
OPEC’s crude oil production is estimated to have increased to a 3-month high of 24.96 million barrels per day (BPD) in April.
- Brent Crude dropped by 0.31% on Monday evening to close at $66.1 compared to its closing price of the previous day’s trading session.
- The WTI dropped by 0.29% on Sunday to close at $64.73, Bonny light crude dropped by 0.16% to close at $66.71, while the OPEC basket dropped by 2.39% to close at $68.20.
- Oil prices recorded a weekly gain against the backdrop of optimism over a global economic recovery, despite the Covid-19 crisis in India which is biting hard.
- In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activities.
Nigeria’s external reserve plunged for the 14th consecutive day on Friday, 7th May 2021 as it dropped by about $18 million to close at $34.72 billion.
- The nation’s foreign reserve declined from $34.74 billion recorded as of Thursday, 6th May 2021 to $34.72 billion on Friday, representing a 0.05% decline.
- Nigeria’s foreign reserve has dipped $537.36 million since 16th April 2021 to date.
- Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN extends its naira 4 dollar initiative.