Naira gains at NAFEX window despite low FX supply

Wednesday, 21st April 2021: The exchange rate between the naira and the US dollar closed at N410 to a dollar at the Importers and Exporters window, where forex is traded officially.

Nigeria’s exchange rate appreciated against the US dollar on Wednesday to close at N410/$1. This represents a 0.16% gain compared to N410.67/$1 recorded on Tuesday, 20th April 2021.

The naira remained stable at the parallel market, closing at N486/$1 on Wednesday, 21st April 2021 after it depreciated by 0.83% in the previous trading session.

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters window on Wednesday to close at N410/$1. This represents a 67 kobo gain when compared to N410.67/$1 recorded on Tuesday, 20th April 2021.

  • The opening indicative rate closed at N409.54 to a dollar on Wednesday. This is 4 kobo depreciation, compared to N409.5/$1 recorded on Tuesday.
  • Also, an exchange rate of N422 to a dollar was the highest rate recorded during intra-day trading before it settled at N410/$1. It also sold for as low as N394/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dipped by 59.7% on Wednesday, 21st April 2021.
  • Forex turnover decreased from $99.49 million recorded on Tuesday, 20th April 2021, to $40.13 million on Wednesday.

Cryptocurrency watch

Bitcoin dipped by 3.96% to close at $54,267.91 on Wednesday, 21st April 2021.

  • The world’s most sought-after digital asset lost $2,235.28 in Wednesday’s trading session as the total Cryptocurrency market capitalisation dipped by 2.98% to close at $1.97 trillion.
  • Since the directive by the CBN to place a ban on crypto transactions in the country earlier in the year, usage of Bitcoin’s peer-to-peer trading in Nigeria has surged by 27%.
  • Notably, in the past 85 days, Nigerians have moved about $103 million worth of Bitcoins on just Paxful and LocalBitcoins channels alone.

Crude oil price slumps

The price of Brent crude oil dipped by 1.88% to close at $65.32 on Wednesday, 21st April 2021.

  • The decline in the price of crude was attributed to concerns that surging COVID-19 cases in India will drive down fuel demand in the world’s third-biggest oil importer.
  • Meanwhile, data from the American Petroleum Institute revealed that U.S. crude oil stocks rose by 436,000 barrels in the week ended 16th April 2021.
  • However, Libya’s National Oil Corporation declared force majeure on exports from the port of Hariga due to lack of maintenance funds, consequently shutting down several fields and bringing the country’s production to less than 1 million barrels per day.
  • Brent Crude closed at $65.32 (-1.88%), WTI Crude closed at $61.17 indicating a 0.29% decline, while natural gas also grew by 0.26% to close at $2.699.

External reserve

Nigeria’s external reserve declined by 0.1% on Tuesday, 20th April 2021 to stand at $35.18 billion.

  • According to data obtained from the Central Bank of Nigeria (CBN), Nigeria’s external reserve dipped further on Wednesday from $35.22 billion recorded as of 19th April 2021 to $35.18 billion on Tuesday.
  • The second consecutive decline comes on the back of 19 successive growth recorded in Nigeria’s external reserve position.
  • Meanwhile, the Central Bank of Nigeria has moved to improve dollar inflow into the country by assuring exporters that they will continue to have unrestrained access to their export proceeds.
  • Governor Emefiele however, tasked exporters on repatriation of their export proceeds to improve foreign exchange inflows into Nigeria.

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