For the first time at NAFEX, Exchange rate maintains N400/$1 for a straight one week

Friday 12th February 2021: The exchange rate between the naira and the dollar depreciated closing at N404.67/$1 at the NAFEX (I&E Window) where forex is traded officially.

Naira closed against the US Dollar at N404.67/$1, representing a 1.17% depreciation compared to N400/$1 recorded at the close of trade on Thursday, 11th February 2021. This also represents the fourth straight day Naira closed in the N400/$1 region.

The official exchange rate at the NAFEX (I&E) Window has now closed above N400/$1 for 5 days consecutively the first time ever. This suggests the forex market can expect to use N400-405/$1 as the official exchange rate when quoting for transactions.

At the parallel market where forex is traded unofficially, the naira appreciated closing at N473/$1 on Friday, February 12. This represents a N2 gain when compared with the N475/$1 that it closed on the previous trading day.

Also, Nigeria’s external reserves lost $312.5 million in 7 days as it fell to $35.804 billion as of February 11, 2021, from $36.116 billion as of February 3, 2021, according to data from CBN.

Trading at the official NAFEX window

The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N404.67/$1. This represents a N4.67 drop when compared to the N400/$1 that it closed on the previous trading day.

  • The opening indicative rate closed at N401.63 to a dollar on Friday. This represents a 12 kobo gain when compared to N401.75 to a dollar that was recorded the previous trading day on Thursday, February 11, 2021.
  • An exchange rate of N422.59 to a dollar was the highest rate during intra-day trading before it closed at N404.67 to a dollar. It also sold for as low as N386/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window rose by 22% on Friday, February 12, 2021.
  • Forex turnover increased from $79.07 million on Thursday, February 11, 2021, to $96.5 million on Friday, February 12, 2021.

Cryptocurrency Watch

The world’s largest cryptocurrency, Bitcoin, reached a new record high as it nears $50,000 mark. It reached about $49,694 earlier on Sunday before later hitting around $48,904

  • This came after reports indicated that a number of bank accounts linked to crypto have been allegedly closed by their respective banks as a result of the CBN’s directive prohibiting banks and other financial institutions from dealing in crypto-related transactions. 
  • The Securities and Exchange Commission (SEC) had also disclosed that there is no policy conflict between itself and the Central Bank of Nigeria (CBN) concerning the ban placed on Cryptocurrency in Nigeria’s banking industry.
  • It is also worth noting that the Senate mandated its Committees on Banking, Insurance and other Financial Institution, ICT and Cybercrimes and Capital Market to invite the Governor of the CBN for a briefing on the ban on crypto transactions.

Oil price goes past $63 mark

Brent crude oil price hit $63.58, highest in more than a year, on Sunday evening, as it goes past the $63 mark.

  • This came as a result of output curbs from top oil producers, dropping down global inventories.
  • The continuous rise in oil prices is also aided by expectations that production curbs by OPEC+ would tighten the market in the first quarter.
  • OPEC oil output has risen for the seventh month in January after the group and its allies agreed to ease record supply cuts further, although an involuntary drop in Nigeria’s exports has limited the increase.
  • Meanwhile, WTI Crude closed at $60.58 (+1.36), Bonny Light $60.77 (+0.37), and OPEC Basket $60.54 (+0.09).

Nigeria’s external reserve dips despite rallying oil prices

  • The external reserve has dropped further to $35.8 billion as of February 11, 2021. T
  • This represents a decline of 0.12% compared to $35.85 billion as of 10th February 2021.
  • The foreign reserve has been on a steady decline since the 25th of January 2021, losing a total of $717.3 million in 15 days.
  • Meanwhile, this is still an improvement on the $35.37 billion that it was as of December 31, 2020.
  • Nigeria also, needs the external reserves to hit $40 billion if it is to adequately meet some of the pent up demand that has piled up since 2020 when oil prices crashed and the pandemic caused major economic lockdowns.

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