Exchange rate appreciates at official market despite 27.8% drop in dollar supply

Friday, 13th August 2021: The exchange rate between the naira and the US dollar closed at N410.80/$1 at the official Investors and Exporters window.

Naira appreciated against the US dollar to close at N410.80/$1 on Wednesday, representing a 0.21% gain when compared to the N411.67/$1 that was recorded the previous day.

However, the naira still remained stable at the parallel market to close at N515/$1 on Friday, August 13, 2021. This was the same rate that it traded the previous day.

The local currency closed the week stronger at the official market as it recorded its biggest gain in about a month despite falling at the black market during the week. Dollar supply dropped by 27.8% on Friday.

Trading at the official I&E window

Naira appreciated against the US dollar at the Investors and Exporters window on Friday to close at N410.80/$1. This represents an 87 kobo gain when compared to the N411.67/$1 that was recorded on Thursday, August 12, 2021.

The opening indicative rate closed at N411.27/$1 on Friday, 13th August 2021, representing a 56 kobo gain when compared to the N411.83/$1 that it closed at on Thursday, 12th August 2021.

An exchange rate of N412.50 to a dollar was the highest rate recorded during intra-day trading, before it settled at N410.80/$1, while it sold for as low as N400/$1 during intra-day trading.

Meanwhile, forex turnover at the Investors and Exporters (I&E) window dropped by 27.8% on Friday, 13th August 2021.

Forex turnover declined from $150.99 million recorded on Thursday, 12th August 2021 to $109.03 million on Friday, August 13, 2021.

Cryptocurrency watch

The world’s most popular and largest cryptocurrency, Bitcoin, was up by 1.78% to trade at $47,540.59 on Sunday evening as it continues with its upward movement.

The total market value of cryptocurrencies rose above $2 trillion again as Bitcoin continued to climb with the likes of Cardano, XRP and Dogecoin advancing as well.

The cryptocurrency market value rose to $2.06 trillion on Saturday, according to CoinGecko, which tracks more than 8,800 coins.

Bitcoin reached as high as $48,152, the highest level since May 16, as it showed staying power above its 200-day moving average.

It wasn’t just Bitcoin holding up the overall market advance, As of 1 p.m. in Hong Kong on Sunday, Cardano, now the third-ranked cryptocurrency after Bitcoin and Ether, was up 47% over the past 7 days.

Binance Coin gained 14%, XRP 61% and Dogecoin 18% over the same period, according to CoinGecko pricing.

The second-largest cryptocurrency by market capitalization, Ethereum, was up by 2.23% on Sunday evening to trade at $3,302.91 at the time of writing this report.

Crude oil price

Oil prices dropped for a third straight day with Brent crude dropping by 1.05% on Sunday evening to trade at $69.85 per barrel, as the continued spread of the delta coronavirus variant hurt prospects for global demand just as drilling data from the U.S. pointed to increased activity.

The WTI had earlier on Sunday slumped 1.1% after a 0.9% loss on Friday as fresh virus outbreaks have started weighing on China’s economy, with retail sales growth and industrial output slowing.

Oil prices had shown some resilience as it last week, pulled off a noteworthy performance with Brent remaining above the $70 per barrel mark despite mounting COVID fears in China and the US.

After soaring in the first half, crude oil’s rally has started to fray since mid-July. The spread of delta, including in key consumer China, has undermined the outlook for consumption as restrictions on mobility are reintroduced.

At the same time, OPEC+ has proceeded with plans to gradually increase production, rolling back the supply curbs it imposed in the early days of the pandemic.

The US President, Joe Biden, had called on OPEC+ to drill more in order to counter rising gasoline prices.

WTI Crude was down by 1.15% on Sunday evening to trade at $67.65 per barrel, Natural gas recorded a 0.80% drop in price to trade at $3,830. Bonny Light was down by 0.46% to trade at $69.76 per barrel.

External reserve

Nigeria’s foreign reserve dropped marginally by $2 million on Thursday, 12th August 2021 to close at $33.584 billion compared to $33.586 billion recorded as of 11th August 2021.

Since the reserve started moving positively, it has gained over $490.1 million in 30 days, despite enduring a significant plunge in the previous months.

Recall that the Central Bank of Nigeria banned the sale of foreign exchange to Bureau De Change (BDC) operators in the country, due to reports of the operators’ illegal trading of the dollar, trading beyond the limit threshold of $5,000 and gradually dollarizing the Nigerian economy, according to the CBN governor.

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