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Naira gains at official forex market as demand pressure dampens rate at black market

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Meanwhile, the exchange rate remained flat at the parallel market to close at N530/$1. This represents a record low compared to an average of N515 recorded in the previous month. The naira fell to an all-time low of N530/$1 against the US dollars in the black market on Thursday and has since maintained the rate.

The depreciation at the black market was attributed to increased demand for foreign exchange by importers who cannot access forex at the official window.

Trading at the official NAFEX window

The exchange rate gained against the US dollar on Friday 3rd September 2021 to close at N411.5 to a dollar, representing a 0.04% appreciation compared to N411.67/$1 recorded in the previous trading day.

The opening indicative rate closed at N411.42/$1, the same as recorded on Thursday, 2nd September 2021.

An exchange rate of N412.92 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 decreased from a record high by 57% on Friday 3rd September 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover dipped from $296.34 million recorded on Thursday to $127.51 million on Friday 3rd September 2021.

Cryptocurrency watch

The Crypto market started the week on a bullish note as positive investor sentiments pushed the industry market capitalisation up marginally by 0.21% in the early hours of Monday. Indicating a gain of over 43 billion as of the time of writing this article.

The gain in the market was driven by the positive growth recorded in Bitcoin, which is the world’s most valuable crypto asset. Bitcoin gained marginally by 0.01% to trade above $51.

Meanwhile, Ethereum dipped by 0.22% to trade at $3,942.2, while XRP gained 1.12% at $1.32154.

Meanwhile, Nigeria is set to kick start the 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.

Crude oil starts week bearish

The crude oil market started the week on a bearish note with Brent Crude trading at $71.6 per barrel, representing a 1.39% decline as of 6:45am on Monday.

In the same vein, West Texas Intermediate (WTI), also recorded a 1.47% decline in price to trade at $68.27 per barrel, while Natural Gas gained about 0.21% to trade at $4.722.

Nigeria’s local crude oil, Bonny Light also dipped by 0.39% in price to trade at $71.76 per barrel while the OPEC Basket grew marginally by 0.52% to trade at $71.64 per barrel on Monday.

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.

External reserve

Nigeria’s foreign reserve rose by $79.9 million as it recorded its seventh increase in over 2 weeks to close at $34.18 billion on Thursday, 2nd September 2021, compared to $34.1 billion recorded as of the previous day. The latest increase represents a 0.23% boost in the country’s foreign reserve.

The reserve has gained $162.24 million in the month of September and has lost a total of $1.19 billion year-to-date compared to $35.37 billion recorded as of 31st December 2021.

While recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021, the recent rally could indicate we are towards hitting the projected numbers.

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