Naira appreciates at official window despite 30.7% drop in dollar supply

Wednesday, 28th April 2021: The exchange rate between the naira and the US dollar closed at N411.25/$1 at the Importers and Exporters window.

Naira appreciated on Wednesday, at the Nigerian Autonomous Foreign Exchange (NAFEX) window, as the rate closed at N411.25 to a dollar. This represents a 42 kobo gain when compared to the N411.67/$1 that was recorded on Monday, 26th April 2021.

However, the naira remained stable at the parallel market to close at N485/$1 on Wednesday. This was the same rate that was recorded the previous day.

The naira gained at the official window despite the low liquidity at the forex market with dollar supply dropping by 30.7%.

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters window on Wednesday to close at N411.25/$1, representing 42 kobo gain when compared to the N411.67/$1 that was recorded on Tuesday.

  • The opening indicative rate closed at N410.19 to a dollar on Wednesday, 28th April 2021, representing a 14 kobo drop when compared to the N410.05/$1 that was 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 N411.25/$1. It also sold for as low as N395/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window dropped by 30.7% on Wednesday, 28th April 2021.
  • FMDQ showed that forex turnover declined from $48.42 million recorded on Tuesday, 27th April 2021, to $33.55 million on Wednesday, April 28, 2021.

Cryptocurrency watch

The world’s most priced and largest digital asset traded near the $55,000 mark as Etherum soared to a new all-time record price.

  • Bitcoin dropped on Wednesday to trade at $54,871 on Wednesday evening as Nexon joined the list of tech companies embracing the digital currency, buying about $100 million worth of Bitcoin.
  • Bitcoin is facing a make or break moment following a recent series of sell-off by investors as Troy Gayeski of Skybridge Capital asks investors not to sweat over the volatility around Bitcoin, saying they have to expect huge pullbacks.
  • The price of Ethereum, the world’s second-biggest cryptocurrency in terms of market capitalization and volume hit an all-time high on Wednesday rising to $2,757.

Crude oil price

The price of crude oil moved up on Wednesday, April 28, 2021, after the Energy Information Administration reported a small inventory build of 100,000 barrels for the week to April 23.

  • At 493.1 million barrels, oil inventories are within the five-year seasonal average. Analysts had expected the EIA to report a lightly larger inventory increase of 375,000 barrels.
  • Brent Crude rose by 1.28% to trade at $67.27, indicating an increase of $0.85, compared to the previous day’s price.
  • WTI Crude went up by 0.20% after initially going up earlier in the day to trade at $63.73, Bonny light rose by 0.41% to trade at $64.20 while Natural Gas currently sells for an average of $2,925.
  • Despite the re-emerging Covid 19 crisis in India, oil prices maintained momentum even as OPEC+ has decided to go ahead with previously agreed production hike plans.
  • Oil prices have surprisingly been steady over the past week, despite serious doubts about the state of the demand recovery in India. Saudi Arabia, in particular, is expected to be cautious when it comes to additional production hikes.

External reserve

Nigeria’s external reserve position dropped by 0.1% on Tuesday 27th April 2021 to stand at $34.974 billion.

  • Data obtained from the Central Bank of Nigeria (CBN), revealed that Nigeria’s external reserve dipped from $35.008 billion recorded on 26th April 2021 to $34.974 billion on Tuesday, April 27, 2021.
  • This represents the seventh consecutive decline recorded during the week in Nigeria’s external reserve, having had 19 successive growths.
  • The growth recorded was attributed to increasing global oil prices and some of the measures introduced by the CBN to boost dollar inflow in the country’s forex market, such as the naira 4-dollar scheme.

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