Naira drops at NAFEX to record N438/$1 during intra-day trading

Wednesday, 7th April 2021: The exchange rate between the naira and the US Dollar closed N411/$ at the Investors and Exporters window.

The Naira depreciated against the US Dollar for the third time in a row on Wednesday, 7th of April 2021, to close at N411/$1. This represents a 0.12% decline when compared to N410.5 recorded on Tuesday.

Despite the depreciation recorded in the I&E window, the naira remained stable in the parallel market on Wednesday to close at N485 to a dollar, the same as recorded since last week.

Meanwhile, the dollar supply in the official exchange market dropped to its lowest in over 5 months as it declined by 71% on Wednesday to stand at $11.85 million.

Trading at the official NAFEX window

Naira depreciated against the US Dollar at the Investors and Exporters window on Wednesday to close at N411 to a dollar. This represents a 50 kobo decline when compared to N410.5/$1 recorded on Tuesday, 6th April 2021.

  • The opening indicative rate closed at N409.74 to a dollar on Wednesday. This represents a N0.26 depreciation when compared to N409.48/$1 recorded on Tuesday.
  • Also, an exchange rate of N438 to a dollar was the highest rate recorded during intra-day trading before it closed at N411/$1. It also sold for as low as N405/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dropped by 71% on Wednesday, 6th April 2021.
  • FMDQ showed that forex turnover declined from $40.8 million recorded on Tuesday, April 6, 2021, to $11.85 million on Wednesday, April 7, 2021.

Cryptocurrency watch

Major crypto assets recorded a significant drop in Wednesday’s trade as the world’s most popular crypto asset, Bitcoin slumped by 3.13%, losing about $1,818.66 in a single day’s trade.

  • Bitcoin fell by 3.13% as of 11:00 pm on Wednesday to trade at $56,199.64
  • Also, Ethereum lost 5.56% to trade at $1,995.18, hence losing a total of $117.51.
  • Meanwhile, it was reported that the court has granted Ripple access to U.S SEC documents expressing the financial regulator’s interpretation or views about crypto assets. This saw the asset rallied in the early hours of the say.

Oil price gain marginally

Crude oil prices recorded a marginal gain on Wednesday to close at $63.09 (Brent Crude), representing a 0.56% gain.

  • The marginal growth in the price of crude could be attributed to the revived optimism in the market as the United Kingdom has given the first vaccine to about half of its population, while the US has vaccinated about 30% of its population.
  • Crude prices grew despite extended lockdowns in major countries in Europe as they battle with the third wave of the pandemic.
  • Brent Crude closed at $63.09 (+0.56%), WTI Crude closed at $59.77 indicating 0.74% gain, Bonny Light, $62.24 (+1.14%), OPEC Basket (-0.6%) to close at $61.33 while Natural gas grew by 2.61% to close at $2.52.

External reserve

Nigeria’s external reserve gained $129.8 million on Tuesday, 6th April 2021 to close at $34.98 billion, the highest single-day gain recorded in about 3 months.

  • This indicates a 0.37% increase when compared to $34.85 billion recorded on Thursday 1st April 2021.
  • This also represents the 11th 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 $558.8 million in 11 days.
  • 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.
  • Nigeria will now hope for the reserve to $40 billion so as to be able to meet up with pent-up demand that had accumulated since the crash of crude oil price in 2020.

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