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Naira depreciates further at black market, trades at N535/$1

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Naira depreciates further at black market, trades at N535/$1

Wednesday, 8th September 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 depreciated against the US dollar on Wednesday, to close at N411.5/$1 compared to N410.67/$1 recorded at the close of trade on Tuesday, 7th September 2021, representing a 0.2% fall.

Similarly, the exchange rate depreciated to a new record low at the parallel market to close at N535/$1. This represents a 0.56% fall compared to N532/$1 recorded as of Tuesday, 7th September 2021. The persistent fall of the exchange rate at the parallel market has been attributed to demand pressure from Investors who couldn’t obtain forex from the banks.

Nigeria’s foreign reserves recorded a further boost of $98.58 million on Tuesday, 7th September to close at $34.59 billion, compared to $34.49 billion recorded a day before. The reserve position has gained $579.1 million so far in the month of September 2021.

Trading at the official NAFEX window

Exchange rate depreciated against the US dollar on Wednesday 8th September 2021 to close at N411.5 to a dollar, representing a 0.2% fall compared to N410.67/$1 recorded in the previous trading day.

The opening indicative rate closed at N411.58/$1, a 51 kobo depreciation compared to N411.07/$1 recorded on Tuesday, 7th September 2021.

An exchange rate of N412.16 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 increased by 130.6% on Wednesday 8th September 2021. According to data tracked by FMDQ, forex turnover grew from $128.11 million recorded on Tuesday to $295.39 million on Wednesday 8th September 2021.

Cryptocurrency watch

The crypto market recorded a marginal decline in total market capitalisation as it dipped by 0.02% to close at $2.1 trillion, indicating a loss of $516.9 million in Wednesday’s trading session. The market had recorded significant downturn on Tuesday, losing over 11% in a single day’s trade.

The initial loss was characterised by significant sell-offs recorded in the flagship crypto asset, Bitcoin which dipped $46,300 on Tuesday’s trading session. In the same vein, the world’s most valuable crypto asset declined by 1.55% to close at $46,139.7 on Wednesday, 8th September 2021.

Meanwhile, Ethereum gained by 1.31% on Wednesday to close at $3,474.38, while XRP depreciated by 3.29% to close at $1.09095.

The President of El Salvador had 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.

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 crypto-currency markets, adding that virtual currencies had become their preferred medium of exchange.

Crude oil set for recovery

The crude oil market traded on a positive note as Brent Crude oil closed at $72.71 per barrel on Wednesday, 8th September 2021, representing a 1.42% appreciation compared to the previous day.

In the same vein, West Texas Intermediate (WTI), also recorded a 1.39% gain in price to close at $69.3 per barrel, while Natural Gas gained about 7.57% to close at $4.914. Meanwhile, Bonny Light dipped marginally by 0.31% on Wednesday to close at $70.6 per barrel.

The positive rally in the global crude oil market was attributed to continued supply disruptions in the market. According to oilprice.com, about 80% of the total crude oil production in the U.S. Gulf of Mexico remained shut s a result of Hurricane Ida last week.

External reserve

Nigeria’s foreign reserve rose by $98.6 million to close at $34.59 billion on Tuesday, 7th September 2021, compared to $34.49 billion recorded as of the previous day.

The latest increase represents a 0.29% boost in the country’s foreign reserve. The reserve has gained $579.1 million in the month of September. However, it has declined by $776.9 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 projected target.

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