Naira declines against USD as external reserves plunges

Tuesday, 20th April 2021: The exchange rate between the naira and the US dollar closed at N410.67/$1 at the investors and exporters window, where forex is traded officially.

Naira depreciated against the US dollar to close at N410.67 to a dollar on Tuesday, 20th April 2021. This represents a 0.08% decline when compared to N410.33/$1 recorded on Monday, 19th April 2021.

Naira also declined against the US dollar in the parallel market on Tuesday, as it closed at N486/$1, representing 0.83% depreciation compared to N482/$1 recorded on Monday, 19th April 2021.

Nigeria’s foreign reserve dipped for the first in about 19 days, as it declined by 0.1% to stand at $35.22 billion.

Trading at the official NAFEX window

The naira depreciated against the US Dollar at the Investors and Exporters window on Tuesday to close at N410.67/$1. This represents a 34 kobo decline when compared to N410.33/$1 recorded on Monday, 19th April 2021.

  • The opening indicative rate closed at N409.5 to a dollar on Tuesday. This represents a 50 kobo depreciation, compared to N409/$1 recorded the previous day.
  • Also, an exchange rate of N437.41 to a dollar was the highest rate recorded during intra-day trading before it closed at N410.67/$1. It also sold for as low as N381/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window improved by 42.7% on Tuesday, 20th April 2021.
  • FMDQ showed that forex turnover increased from $69.71 million recorded on Monday, April 19th, 2021, to $99.49 million on Tuesday.

Cryptocurrency watch

The world’s most sought-after digital asset, Bitcoin grew by 1.56% to trade at $56,562.53 on Tuesday, 20th April 2021.

  • Bitcoin increased by $867.98, while Ethereum also grew by 7.96% to trade at $2,336.1.
  • The cryptocurrency had fallen to $52,000 on Sunday, sharply off its record high last week of above $64,800 due to a large sell-off tied to rumours of a regulatory crackdown in the US.
  • It is worth noting that Bitcoin has risen by 680% in the past 12 months.

Crude oil price slumps

Crude oil prices slumped on Tuesday, 20th April 2021 as Brent Crude dipped by 0.72% to close at $66.57.

  • The decrease could be attributed to the growing cases of the covid-19 disease in most European countries.
  • According to reports, Funds have cut their positions across the six major oil contracts for two out of the last three weeks, given the pandemic situation and the persistent uncertainty around jet fuel demand recovery.
  • Oil prices had posted modest gains in the early hours of Tuesday following reports of an outage in Libya. However, demand concerns sent prices falling to close at $66.57.
  • Brent Crude closed at $66.57 (-0.72%), WTI Crude closed at $62.44 indicating 1.48% decline, Bonny Light, $65.17 (-0.12%), OPEC Basket (-0.17%) to close at $65.1 while natural gas also dipped by 0.29% to close at $2.719.

External reserve

Nigeria’s external reserve decreased by 0.1% on Monday, 19th April 2021 to stand at $35.22 billion.

  • Nigeria’s foreign exchange reserve dipped for the first time in 19 days, after enjoying positive growth since the 18th of March, 2021.
  • The recent increase had been attributed to the increase in the price of crude oil after enduring a significant price crash in 2020.
  •  The CBN policy on diaspora remittances might have contributed to the recent positive movement in Nigeria’s external reserve.
  • Meanwhile, the Central Bank of Nigeria has ordered Deposit Money Banks (DMBs) and Bureau De Change operatives to accept old and lower denominations of dollars from their customers as legal tender or face sanctions.

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