Exchange rate maintains N409/$1 for second consecutive day

Tuesday 16th February 2021: The exchange rate between the naira and the dollar remained stable closing at N409.67/$1 at the NAFEX (I&E Window) where forex is traded officially. This is as the dollar supply rose slightly by 8% on Tuesday.

Naira closed against the US Dollar at N409.67/$1, this was the same rate that it closed on Monday, 15th February 2021. This also represents the sixth straight trading day Naira closed in the N400/$1 region.

At the parallel market where forex is traded unofficially, the naira remained stable closing at N473/$1 on Tuesday, February 16. This was the same rate that it closed on the previous trading day.

Also, Nigeria’s external reserves lost $124 million in 3 days as it fell to $35.633 billion as of February 15, 2021, from $35.757 billion as of February 12, 2021, according to data from CBN.

Trading at the official NAFEX window

The Naira remained stable against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N409.67/$1. This was the same rate that it closed on the previous trading day.

  • The opening indicative rate closed at N406.54 to a dollar on Tuesday. This represents a N1.41 drop when compared to N405.13 to a dollar that was recorded the previous trading day on Monday, February 15, 2021.
  • An exchange rate of N410 to a dollar was the highest rate during intra-day trading before it closed at N409.67 to a dollar. It also sold for as low as N390/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window rose by 7.9% on Tuesday, February 16, 2021.
  • Forex turnover increased slightly from $28.21 million on Monday, February 15, 2021, to $30.44 million on Tuesday, February 16, 2021.

Cryptocurrency Watch

The world’s largest cryptocurrency, Bitcoin, reached a new record high as it surges past the $50,000 mark for the first time.

  • The prices have been up by over 70% so far this year and rose by 4.9% to $50,548 on Tuesday evening.
  • This also follows exciting news that includes the world’s most valuable car maker Tesla accepting Bitcoin for future payments, and MicroStrategy planning to raise another $600 million to buy the flagship crypto.
  • Its record-breaking rally is however regarded as less volatile than 2017.
  • A single bitcoin now trades for N18.9 million down 3.3% while Etherum trades for N665.4k down 7.29%. This was as of 7am Wednesday, February 17th 2021.

Oil price heads towards $64 mark

Brent crude oil price hit $63.47, on Tuesday evening, the highest price since January last year as it goes past the $63 mark.

  • The oil prices continue to head higher as Texas still grapples with the arctic blast.
  • The massive supply disruption is coming at a time when US inventories are shrinking at an accelerated pace and the Organization of the Petroleum Exporting Countries are holding millions of barrels a day off the market.
  • The International Energy Agency (IEA) expects that a recovery in global oil demand would outstrip production in the second half of the year, prompting even quicker inventory draws
  • Meanwhile, WTI Crude closed at $60.19 (+0.72), Bonny Light $62.51 (+1.74), and OPEC Basket $62.60 (+2.06).

Nigeria’s external reserve dips despite rallying oil prices

  • The external reserve dipped further to $35.633 billion as of February 15, 2021.
  • This represents a decline of 0.35% compared to $35.757 billion as of 12th February 2021.
  • The foreign reserve has been on a steady decline since the 25th of January 2021, losing a total of $888 million in 15 to date.
  • 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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