Tuesday, 7th September 2021: The exchange rate between the naira and the US dollar closed at N410.67/$1 indicating a further appreciation at the official Investors and Exporters window.
Naira gained against the US dollar on Tuesday, to close at N410.67/$1 compared to N411.13/$1 recorded at the close of trade on Monday, 6th September 2021, representing a 0.11% appreciation.
Meanwhile, the exchange rate remained flat at the parallel market to close at N532/$1. This is the same rate recorded at the close of trade on Monday, 6th September 2021.
Nigeria’s foreign reserves recorded a boost of $240.6 million on Monday, 6th September to close at $34.49 billion, compared to $34.26 billion recorded a day before. The reserve position has gained $480.5 million so far in the month of September 2021.
The cryptocurrency market recorded significant losses on Tuesday, as El-Salvador celebrates Bitcoin Day, in commemoration of their Bitcoin adoption as legal tender.
Trading at the official NAFEX window
Exchange rate gained against the US dollar on Tuesday 7th September 2021 to close at N410.67 to a dollar, representing a 0.11% appreciation compared to N411.13/$1 recorded on the previous trading day.
The opening indicative rate closed at N411.07/$1, a 75 kobo appreciation compared to N411.82/$1 recorded on Monday, 6th September 2021.
An exchange rate of N412.95 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.67/$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 increased by 31.3% on Tuesday 7th September 2021.
FMDQ, forex turnover grew from $97.54 million recorded on Monday to $128.11 million on Tuesday 7th September 2021.
Cryptocurrency watch
The crypto market nosedived on Tuesday, triggered by huge selloffs as investors lost over $299 billion in one day. The total market capitalisation of the crypto industry declined by 12.57% to close at $2.08 trillion.
The bearish trade on Tuesday was largely driven by declines recorded in major crypto assets, especially the world’s most popular cryptocurrency bitcoin, which dipped 11.54% as of the close of trade on Tuesday to close at $46,627.31.
Similarly, Ethereum dipped by 14% on Tuesday to close at $3,378, while XRP dropped significantly by 20.83% to close at $1.10115.
The President of El Salvador announced the additional purchase of 150 BTC on Tuesday, as he stated that he is buying the dip. The president however blames the price crash of Bitcoin on the IMF, which has been spreading Fear, Uncertainty, and Doubt about the country’s adoption of Bitcoin as legal tender.
Meanwhile, Nigeria is set to kick start its pilot scheme of its Central Bank Digital Currency (CBDC) known as ‘e-Naira’ on the 1st of October 2021, with the blockchain technology known as the Hyperledger Fabric Blockchain being adopted.
The Chairman of Nigeria’s Economic and Financial Crimes Commission, Abdulrasheed Bawa has hit on the risk associated with Bitcoin and other cryptocurrencies to the world economy. According to him, many criminals now play significant roles in cryptocurrency markets, adding that virtual currencies had become their preferred medium of exchange.
Crude oil closed bearish
The crude oil market traded on a bearish note as Brent Crude oil closed at $71.69 per barrel on Tuesday, 7th September 2021, representing a 0.73% decline compared to the previous day.
In the same vein, West Texas Intermediate (WTI), also recorded a 0.01% decline in price to close at $68.34 per barrel, while Natural Gas gained about 0.61% to trade at $4.596.
Crude oil prices had surged in the previous week after Hurricane Ida damaged offshore platforms and flooded refineries during the week. During the previous week, member states at the OPEC+ meeting reiterated their commitment to the 400,000 b/d monthly increase over the rest of the month.
The bearish trade was attributed to rising U.S dollar and more concerns about demand. Note that a stronger dollar makes oil buying more expensive for holders of other world currencies.
Oil prices were also weighed down by the deep Saudi cut in its prices for Asia, for October, which is an indication that the world’s largest oil exporter wants to keep its market share in its most important market.
External reserve
Nigeria’s foreign reserve rose by $240.6 million to close at $34.49 billion on Monday, 6th September 2021, compared to $34.26 billion recorded as of the previous day. The latest increase represents a 0.7% boost in the country’s foreign reserve.
The reserve has gained $480.5 million in the month of September and has lost a total of $875.million year-to-date compared to $35.37 billion recorded as of 31st December 2021.
Meanwhile recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021, the recorded growth in the country’s foreign reserve position could be a positive step towards hitting the projected target.