Naira weakens at NAFEX window as dollar supply continues to dwindle
- 7th April 2021
- Posted by: Hakeem
- Category: Currencies
Tuesday, 6th April 2021, the exchange rate between the naira and the US dollar closed at N410.5/$1 at the Investors and Exporters window.
The naira depreciated further against the US dollar on Tuesday, 6th of April 2021 to close at N410.5 to a dollar at the NAFEX window. This represents a 0.29% decline when compared to N409.3 recorded in the previous trading session (Thursday, 1st April 2021).
Naira, however, remained stable at the parallel market as it closed at N485/$1, which is the same as recorded on Monday, 5th April 2021.
Meanwhile, dollar supply at the Importers and Exporters window continues to dwindle, gaining marginally to stand at $40.8 million.
Trading at the official NAFEX window
- The naira depreciated against the US Dollar at the Investors and Exporters window on Tuesday to close at N410.5/$1. This represents a N1.20k decline when compared to N409.3/$1 recorded on Thursday, 1st April 2021.
- The opening indicative rate closed at N409.48 to a dollar on Tuesday. This represents 48 kobo decline compared to N409/$1 recorded the previous day.
- Also, an exchange rate of N419.3 to a dollar was the highest rate recorded during intra-day trading before it closed at N410.5/$1. It also sold for as low as N394/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window increased by 14.8% on Tuesday, 6th April 2021.
- A cursory look at the data tracked by Bigwig FX from FMDQ showed that forex turnover increased from $35.55 million recorded on Thursday, 1st April 2021, to $40.8 million on Tuesday.
Bitcoin, the most popular digital asset in the world lost 1,210.9 on Tuesday to close at $57.914.02, representing a 2.04%% decline in a single day.
- On the other hand, Ethereum gained 0.48% to close at$2,117.35 while USDTUSD traded at $1.003 (+0.03%) on Tuesday.
- Meanwhile, a recent article by Bigwig FX states that the present amount of Bitcoin held on leading crypto exchanges suggests a likely bullish bias on the price of Bitcoin as business entities and large organisations continue to accumulate the crypto asset at record levels despite the strong dollar and rising U.S Treasury yields.
- It is also worth noting that MicroStrategy, a leading institutional investor of the flagship asset revealed that it had purchased an additional 253 bitcoins for $15 million in cash at an average price of $59,339 per bitcoin.
- According to a report, Bitcoin, which is the largest and most priced digital asset in the world, is currently worth more than $1 trillion after its price rallied high in the year 2021.
Crude oil gains marginally
The price of Brent Crude oil gained marginally on Tuesday as it closed at $62.6, which represents 0.72% increase when compared to the previous day’s trade.
- It is however still trading significantly below its year-to-date high when it hit the prediction of $70 dollars per barrel.
- The recent bearish trade in the oil market can be attributed to concerns about oil demand as the OPC+ decided to ease the production cuts by more than 1 million bpd over the next three months.
- Also, OPEC Basket crude declined by 2.17% to close at $61.7 on Tuesday, 6th April 2021.
- Brent Crude oil closed at $62.6, WTI Crude ($59.33), Bonny Light ($61.54), and Natural Gas at $2.556.
Nigeria’s external reserve gained $25.1 million on Thursday, 1st April 2021 to close at $34.85 billion.
- This indicates a 0.07% increase when compared to $34.82 billion recorded on Wednesday 31st March 2021.
- This also represents the 10th consecutive increase in the country’s external reserve position having endured a significant downturn in the early parts of the year. Nigeria’s reserve has added a total of $428.9 million in 10 days.
- The current positive trend started on 19th March 2021 when it gained $39.58 million in a single day.
- This recent growth could however be attributed to the increase in crude oil prices recorded earlier in March and the possible increase in diaspora remittance as the CBN offers incentives for every unit of dollar received from diaspora remittance.