Naira gains at official window as dollar supply improves significantly by 80%

Tuesday, 22nd June 2021: The exchange rate between the naira and the US dollar closed at N410/$1 at the official Investors and Exporters window.

Naira appreciated on Tuesday against the US dollar to close at N410 to a dollar compared to N411.67/$1 recorded on Monday, 21st June 2021.

The exchange rate remained stable at the parallel market to close at N500/$1 on Tuesday, June 22, 2021. This was the same rate that was recorded on Monday, June 21, 2021.

The local currency gained at the official window as the dollar supply improved significantly by 79.5%.

Trading at the official NAFEX window

Naira appreciated against the US dollar at the Investors and Exporters window on Tuesday to close at N410/$1, representing a N1.67 gain when compared to the N411.67/$1 that was recorded the previous day.

  • The opening indicative rate closed at N410.95 to a dollar on Tuesday, 22nd June 2021, representing a 9 kobo gain when compared to the N411.04/$1 recorded on Monday, 21st June 2021.
  • Also, an exchange rate of N420.88/$1 was the highest rate recorded during intra-day trading, before it settled at N410/$1. It also sold for as low as N387.67/$1 during intra-day trading.
  • Forex turnover at the Investors and Exporters (I&E) window dropped by 79.5% on Tuesday, 22nd June 2021.
  • FMDQ showed that forex turnover increased from $94.17 million recorded on Monday, 19th June 2021 to $169.07 million on Tuesday, 22nd June 2021.

Cryptocurrency watch

The world’s largest and most popular cryptocurrency, Bitcoin, made a rebound as it rose by 2.933% to close at $33,860.33 on Tuesday evening, after initially crashing below $30,000 mark in the morning with the crypto market entering a freefall

  • Bitcoin fell more than 11% Tuesday morning after China ramped up its crackdown on cryptocurrency mining.
  • The cryptocurrency, which in April had risen higher than $60,000, plunged to a value of under $30,000 and saw all 2021 gains disappear. It rose back up past $30,000 later in the day.
  • The dramatic fall comes as China has taken steps to further restrict Bitcoin mining and trading within its territory.
  • China has increased crackdowns on mining, creating a significantly rougher environment for the world’s leading miner of bitcoin.
  • The second-largest cryptocurrency by market value, Ethereum was up by 1.97% on Tuesday evening to close at $2,012.06.

Crude oil

Crude oil continued its positive performance as it rose on Tuesday with the Brent Crude closing at $75.31 per barrel as oil prices got another boost from falling crude inventories.

  • Brent crude oil rose by 0.67% as of Tuesday evening, 22nd June 2021, to close at $75.31 per barrel.
  • The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 7.199-million barrels for the week ending June 18.
  • Analysts had predicted a much smaller draw of 3.942 million barrels for the week.
  • In the previous week, the API reported a draw in oil inventories of 8.537 million barrels after analysts had predicted a draw of 3.290 million barrels.
  • Data from Energy Information Administration said that while crude oil inventories fell yet again this week, U.S. oil production rebounded to an average of 11.2 million BPD for the week ending June 11.
  • OPEC+ is considering a further easing of oil output cuts from August as oil prices rise on-demand recovery, although no decision had been taken yet on the exact volume to bring back to the market.
  • WTI Crude declined by 0.81% to close at $73.06, Bonny Light gained 0.73% to close at $74.26 per barrel, OPEC Basket recorded a 1.01% drop to close at $71.56, while Natural Gas was up by 0.31% to close at $3.268.

External reserve

Nigeria’s external reserve continued its slide on Tuesday, 21st June 2021 as it dropped by $92 million to close at $33.671 billion.

  • This represents a 0.27% decline compared to $33.763 billion recorded on Friday, 18th June 2021.
  • A total of $1.703 billion has been lost in reserves year-to-date, while month-to-date loss stands at $405.453 million.
  • Nigeria’s forex reserve continues to trend downwards despite the positive rally recorded in the global crude oil market, with Brent crude currently trading at $75.31 per barrel.
  • It is worth noting that India’s oil imports have started recovering after months of lessened activities due to the covid-19 pandemic’s effect on the country’s economy.

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