Naira value falls at NAFEX window following crude oil price dip

Thursday, 1st April 2021, the exchange rate between the naira and the US dollar closed at N409.3/$1 at the Investors and Exporters window, where forex is traded officially.

The naira depreciated against the US dollar on the first day of April 2021 to close at N409.3/$1 at NAFEX window. This represents a 0.15% decline when compared to N408.67/$1 recorded on Wednesday, 31st March 2021.

Meanwhile, Naira gained marginally on the parallel market to close at N485/$1 on Thursday, 1st April 2021 and has remained stable since, as it closed at N485 to a dollar on Monday, 5th April 2021.

Trading at the official NAFEX window

The naira depreciated against the US Dollar at the Investors and Exporters window on Thursday to close at N409.3/$1. This represents a 63 kobo decline when compared to N408.63/$1 recorded on Wednesday, 31st March 2021.

  • The opening indicative rate closed at N409 to a dollar on Thursday. This represents 70 kobo gain compared to N409.7/$1 recorded the previous day.
  • Also, an exchange rate of N413 to a dollar was the highest rate recorded during intra-day trading before it closed at N409.3/$1. It also sold for as low as N401.1/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window increased marginally by 0.5% on Thursday, 1st April 2021.
  • FMDQ showed that forex turnover increased from $35.37 million recorded on Wednesday, March 31, 2021, to $35.55 million on Thursday.

Cryptocurrency watch

Bitcoin, the most popular digital asset in the world gained 628.58 on Monday to close at $58,836.37, representing a 1.16% gain as of 11:48 pm on Monday.

  • Meanwhile, 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.
  • Also, 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.
  • It also revealed that it had about 91,579 bitcoins acquired for $2.226 billion at an average price of $24,311 per bitcoin.

Crude oil dips below $60 per barrel

Brent Crude oil prices dipped further on Monday as it closed at $62.15, representing a decline of 4.18% in a single day.

  • This was attributed to renewed concerns about oil demand as the OPEC+ decided to ease the production cuts by more than 1 million bpd over the next three months.
  • Markets got off to a slow start on Monday after a long weekend, owing to the recent decision of the OPEC+ to raise supply over May-July as Covid-19 pandemic continues to affect major economies in Europe and other parts of the world.
  • Meanwhile, Reuters reported that Saudi Arabia has hiked its crude oil prices for Asian buyers by $0.40 per barrel and cut those for European and U.S. buyers by $0.20 and $0.10 per barrel, respectively.
  • Brent Crude oil closed at $62.15, WTI Crude ($59.02), Bonny Light ($61.54), and Natural Gas at $2.515.

External reserve

Nigeria’s external reserve gained $27.87 million on Wednesday, 31st March 2021 to close at $34.82 billion.

  • This indicates a 0.08% increase when compared to $34.79 billion recorded on Tuesday, 3rd March 2021.
  • This also represents the ninth consecutive increase in the country’s external reserve position having endured a significant downturn in the early parts of the year.
  • The current positive trend started as of 19th March 2021 when it hit $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.

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