Naira gains at NAFEX window as dollar supply surges by 204.4%. Crude oil price hits $75pb again

Wednesday, 28th July 2021: The exchange rate between the naira and the US dollar closed at N411.6/$1 at the official Investors and Exporters window.

Naira gained against the US dollar to close at N411.6/$1 on Wednesday, representing a 0.02% appreciation compared to N411.65/$1 recorded on Tuesday, 27th July 2021.

On the other hand, the naira depreciated significantly by 3.9% at the parallel market to close at N525/$1 as against N505/$1 recorded the previous day. The sudden movement in the exchange rate at the black market was due to the ban on the sale of dollars to BDC operators in Nigeria by the Central Bank.

Trading at the official NAFEX window

Naira appreciated against the US dollar at the Investors and Exporters window on Wednesday to close at N411.6/$1, representing a 7 kobo gain compared to N411.67/$1 recorded on Tuesday.

The opening indicative rate however depreciated from N411.42/$1 recorded on Tuesday, 27th July 2021 to close at N411.5/$1 on Wednesday.

An exchange rate of N413 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.6/$1, while it sold for as low as N352.07/$1 during intra-day trading.

Meanwhile, forex turnover at the Investors and Exporters (I&E) window increased significantly by 204.4% on Wednesday, 28th July 2021 to $352.07 million.

Forex turnover surged from $115.67 million recorded on Tuesday, 26th July 2021 to $352.07 million on Wednesday.

The significant increase in dollar supply is attributable to the allocation of $200 million by the CBN to commercial banks as part of efforts to meet the foreign exchange demand for legitimate users.

Cryptocurrency watch

The crypto market on Wednesday, July 28th 2021 put up a stellar performance as the flagship crypto-asset grew significantly during the day to hit $40,000 during intra-day trade. As of 4:55 am on Thursday, however, Bitcoin had slipped downwards below the $40,000 mark reached the previous day.

Ethereum in the same vein dipped by 10.9% on Thursday to trade at $2,278.29.

As of the time of writing this article, the total cryptocurrency market capitalisation stood at $1.52 trillion, losing about 17.7 billion on Thursday morning.

Crude oil price hits $75pb again

Oil prices extended their bullish performance on Thursday morning as crude oil prices hit the $75 per barrel mark, having gained 0.35% in the early hours.

Also, WTI Crude gained 0.33% to trade at $72.63 per barrel, Bonny Light dipped 0.12% to trade at $72.99, while natural gas gained 1.84% to trade at $4.044.

The OPEC Basket increased on Thursday morning to trade at $73.62 per barrel, representing a gain of 0.81%.

The bullish performance in the global crude oil market can be attributed to the report from the American Petroleum Institute (API) released on Tuesday, which revealed a draw in crude oil inventories of 4.73 million barrels for the previous week. This brings the total crude draw year-to-date to about 54 million barrels.

External reserve

Nigeria’s external reserve gained $14.52 million on Tuesday, 27th July 2021 to close at $33.33 billion compared to $33.32 billion recorded as of Monday, 26th July 2021.

Nigeria’s foreign reserve is gradually picking up, gaining $241.8 million in the last 9 days, despite a significant decline across various weeks.

The Monetary Policy Committee of the CBN noted the bank could issue diaspora bonds which could be used to boost the country’s foreign reserve position.

Leave a Reply

Your email address will not be published. Required fields are marked *