Naira remains stable across forex markets as crude oil price hits $70

Monday, 31st May 2021: The exchange rate between the naira and the US dollar closed at N412/$1 at the Nigerian Autonomous Foreign Exchange window (NAFEX).

Naira remained flat at the Investors and Exporters window on Monday, as it closed at N412 to a dollar, the same as was recorded on Friday, 28th May 2021.

Similarly, Naira maintained stability at the parallel market to close at N495/$1 on Monday, 31st May 2021 while forex turnover recorded a further decline of 19.6% to stand at $125.44 million at the I&E Window.

Trading at the official NAFEX window

Naira remained stable against the US dollar at the Investors and Exporters window on Monday to close at N412/$1.

  • The opening indicative rate appreciated by 9 kobo to close at N410.92 to a dollar on Monday, 31st May 2021, as against N411.01/$1 recorded on Friday, last week.
  • An exchange rate of N420.33 to a dollar was the highest rate recorded during intra-day trading before it settled at N412/$1, while it also sold for as low as 400/$1 during intra-day trading.
  • Forex turnover at the Investors and Exporters (I&E) window decreased by 19.6% on Monday, 31st May 2021.
  • FMDQ revealed that forex turnover reduced from $156.06 million recorded on Friday, 28th May 2021 to $125.44 million on Monday, 31st May 2021.

Cryptocurrency watch

The cryptocurrency market continued in its bearish trend, as the market dipped 1.81% in the early hours of Tuesday to trade with a market capitalisation of $1.6 trillion.

  • Bitcoin, the world’s most capitalised crypto asset, slumped by 1.91% to trade at $36,676.91, while Ethereum recorded a decline of 2.42% to trade at $2,638.88.
  • Meanwhile, despite the ban on crypto transactions in Nigeria, people living in the country traded $169 million worth of bitcoin in five months.
  • Bitcoin, which enjoyed a bullish first quarter of the year, leading to an all-time peak of $63,000 per unit in the middle of April, has since lost more than 40% of its value, now trading around $35,000.

Crude oil price hits $70 per barrel

Crude oil price recorded marginal growth on Monday, 31st May 2021, maintaining its performance from the previous day, as Brent Crude price hit $70 per barrel.

  • In the early hours of Tuesday, 1st June 2021, Brent Crude oil price grew by 1.24% to trade at $70.18 as at 4:20am.
  • The growth came on the back of the optimism expressed by the Joint Technical Committee of the OPEC+ concerning global oil demand.
  • According to reports, the JTC of the OPEC+ maintained its outlook for global oil demand at around 6 million barrels per day this year.
  • Also, OPEC noted in its monthly oil market report in May that it was optimistic that accelerating vaccination programs around the world, and continuous rise in fuel demand would raise global oil demand by 5.95 million barrels per day in 2021.
  • Bonny Light grew 0.54% to trade at $68.38, while natural gas was trading at $3.072, representing a 2.88% increase.

External reserve

Nigeria’s external reserve dropped by $4.11 million on Friday, 28th May 2021 to stand at $34.24 billion, representing a 0.01% decline when compared to $34.25 billion recorded on Thursday, 27th May 2021.

  • Nigeria’s foreign reserve has lost about $1.13 billion year-to-date, having recorded consecutive declines in about a month.
  • The country’s foreign reserve has continued to dip since April 19, 2021, despite the bullish trend recorded in the global oil market.
  • This is, however, attributable to low sales of Nigerian crude oil, due to the resurgence of the COVID-19 pandemic in India.

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