Naira appreciates at official market as dollar supply decreases marginally

Tuesday 17th August 2021: The exchange rate between the naira and the US dollar closed at N411.5/$1 at the Investors and Exporters window, where forex is traded officially.

Naira appreciated against the US dollar to close at N411.5/$1 on Tuesday, representing a 0.04% gain when compared to the N411.67/$1 that was recorded the previous day.

Meanwhile, the naira still remained stable at the parallel market to close at N515/$1 on Tuesday, August 17, 2021. This was the same rate that it traded the previous day.

Trading at the official I&E window

Naira appreciated against the US dollar at the Investors and Exporters window on Tuesday to close at N411.5/$1. This represents a 17 kobo gain when compared to the N411.67/$1 that was recorded on Monday, August 17, 2021.

The opening indicative rate closed at N411.38/$1 on Tuesday, 17th August 2021, representing a 4 kobo appreciation when compared to the N411.42/$1, recorded in the previous trading session.

An exchange rate of N412.85 to a dollar was the highest rate recorded during intra-day trading, before it settled at N411.5/$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 declined by 3.4% on Tuesday, 17th August 2021.

According to data tracked by Nairametrics from the FMDQ, forex turnover decreased from $117.17 million recorded on Monday, 17th August 2021 to $113.17 million on Tuesday.

Cryptocurrency watch

The cryptocurrency market started the day on a positive note, with a 1.78% gain in the crypto market capitalisation at $1.91 trillion, indicating a $32.8 billion gain. This is, however, still lower than the rally recorded on Monday when the market capitalisation surpassed the $2 trillion mark.

Bitcoin currently trades bullish as of 6:30 am on Wednesday, with a 1.47% gain to trade at $45,350.19. This represents a $661.12 appreciation compared to 44,694.35, which is closed on Tuesday.

Ethereum also gained 1.85% to trade at $3,067.66 as of the time of writing this article, while XRP recorded a 3.11% gain in price.

Meanwhile, data reported by Coinbase reveals that Ethereum’s trading volume in Q2 2021 was higher than that of Bitcoin for the first time ever. The company also reported $2.23 billion in revenue and $1.6 billion in net profit.

Crude oil price

Crude oil prices are beginning to pick up after enduring a 3-day losing streak, which saw the price of brent crude slump below $70 per barrel level. Brent Crude currently trades at $69.27, representing a gain of 0.35% so far in the day.

Oil prices had earlier dropped by over 2% early on Monday, as weak data about China’s economy and ultra-low U.S. consumer confidence weighed on the immediate global oil demand outlook. WTI traded below $67 after losing over 3% over the previous four trading sessions.

Meanwhile, WTI now trades at $66.81, 0.33% gain compared to $66.59 per barrel recorded at the close of the previous trading session.

Despite OPEC keeping its demand forecast for 2021 the same from the previous month at 96.6 million bpd, it has slashed its demand forecast by 1.1 million bpd for 2022 to stand at 99.9 million bpd, up by 3.3 million bpd year-on-year.

On the other hand, IEA report is sending a signal that growth in crude oil demand may slow down in the remaining period of 2021, and reiterates that OPEC+ needs to be more cautious in its policies for the year.

External reserve

Nigeria’s foreign reserve declined by $24.7 million on Monday, 16 August 2021 to close at $33.55 billion, compared to $33.58 billion recorded as of Friday, 13 August 2021. Despite the decline, which has endured for four days, it has recorded a month-to-date gain of $151.45 million.

However, an account of its year-to-date movement shows a decline of $1.82 billion compared to $35.37 billion recorded as of December 31st, 2020.

Recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September, as projected in an EFG Hermes publication.

This was made known following the $3.35 billion direct allocations to Nigeria that was approved by the International Monetary Fund (IMF), which is expected to boost the country’s FX position, while an additional planned minimum #3 billion Eurobond issuance could also see a 20% boost in the county’s reserve.

Rebroadcasted:Okwosi Esther

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