Naira gains at NAFEX window as dollar supply improves by 305%

Wednesday, 5th May 2021: The exchange rate between the naira and the US dollar closed at N410.5/$1 at the Importers and Exporters window, where forex is traded officially.

Naira appreciated marginally against the US dollar on Wednesday, 5th May 2021 to close at N410.5 to a dollar. This represents a 50 kobo gain when compared to N411/$1 recorded on Tuesday 4th May 2021.

Meanwhile, the naira maintained stability at the parallel market as it closed at N485/$1, while Nigeria’s external reserve plunged $94.84 million to close at $34.79 billion on Tuesday, 4th May 2021.

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters window on Wednesday to close at N410.5/$1, representing a 50 kobo gain when compared to the N411/$1 that was recorded at Tuesday’s session.

  • The opening indicative rate closed at N410.25 to a dollar on Wednesday, 5th May 2021, representing a 25 kobo appreciation when compared to the N410.5/$1 recorded on Tuesday.
  • Also, an exchange rate of N420.5 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.5/$1. It, however, sold for as low as N400/$1 during intra-day trading, a decline of N5 compared to N395/$1 recorded in the previous day.
  • Forex turnover at the Investor and Exporters (I&E) window spiked by 305.1% on Wednesday 5th, May 2021.
  • FMDQ showed that forex turnover increased from $42.59 million recorded on Tuesday, 4th May 2021 to $172.52 million on Wednesday, 5th May 2021.

Cryptocurrency watch

Bitcoin, the world’s most popular cryptocurrency, made a rebound on Wednesday, as the digital asset gained 7.48% to trade at $57,220.46.

  • As of 11:59 pm on Wednesday, the highly valued cryptocurrency had recovered from the loss of 5.46% it recorded a day before.
  • Also, Ethereum recorded a 9.1% growth on Wednesday to close at $3,533.11. This represents a $3,533.11 appreciation when compared to the previous day’s trading.
  • In the same vein, the total crypto market capitalisation appreciated by 9.44% to close at $2.34 trillion on Tuesday.
  • Meanwhile, according to Paxful, a peer-to-peer trading platform, Nigeria’s cryptocurrency traded volumes on the platform topped $1.5 billion in the first four months of the year 2021.

Crude oil price

Brent Crude oil on Tuesday gained marginally by 0.12% to sell for an average of $68.96 compared to the previous day.

  • The increase in crude oil price was triggered by sustained confidence in the market as a result of the easing of lockdown in the United States, and other European countries.
  • This came on the back of the expected economic and oil demand recovery, owing to the easing of lockdown restrictions by the U.S. towards a full reopening of the economy.
  • The bullish run in the global oil market is in line with Goldman Sachs’ prediction that oil prices will rise to $80 per barrel this summer.

External reserve

Nigeria’s external reserve plunged for the 11th consecutive day on Tuesday, 4th May 2021 as it dipped $94.84 million to close at $34.79 billion.

  • The nation’s foreign reserve declined from $34.88 billion recorded as of Friday, 30th April 2021 to $34.79 billion on Tuesday, representing a 0.27% decline.
  • Nigeria’s foreign reserve has dipped $439.87 million since 16th April 2021 to date.

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