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Naira maintains stability at forex markets, as crypto investors lose $27.5sell-offsp to sell-offs

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Thursday, 15th July 2021: The exchange rate between the naira and the US dollar closed at N411.2/$1 at the official forex market.

Naira remained stable against the US dollar on Thursday, 15th July 2021 to close at N411.2/$1, a marginal appreciation compared to N411.22/$1 recorded on Wednesday, 14th July 2021.

The same was experienced at that black market, as naira maintained an exchange rate of N505/$1 same as maintained since Friday, 9th July 2021. On the other hand, dollar supply at the official forex market dipped by 42.2% on Thursday to stand at $123.69 million.

Trading at the official NAFEX window

Naira appreciated marginally against the US dollar at the Investors and Exporters window on Thursday to close at N411.2/$1 from N411.22/$1 recorded on Wednesday, 14th July 2021.

The opening indicative rate stood at N411.17/$1 on Thursday, representing a 2 kobo appreciation compared to N411.21/$1 recorded in the previous trading session.

An exchange rate of N412.5/$1 was the highest rate recorded during intra-day trading before it settled at N411.2/$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 by 42.2% on Thursday, 15th July 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover declined from $213.99 million recorded on Wednesday, 14th July 2021 to $123.69 million on Thursday, 15th July 2021.

Cryptocurrency watch

The crypto market endured a significant decline on Thursday, recording a decline of 2.07% in market capitalisation to close at $1.3 trillion.

The bearish trade indicated that crypto investors lost a whopping $27.54 billion during the trading session on Thursday.

The most capitalised crypto asset in the world also recorded a 3.06% dip to close at $31,820.15 as of 11:26 pm on Thursday. Ethereum also dipped by 3.27% to close at $1,928.67.

Also, the popular crypto asset, Dogecoin which is known for having powerful supporters including Elon Musk and Mark Cuban, plummeted below 20 cents with co-founder, Jackson Palmer, attacking the crypto industry.

Meanwhile, according to the report by Bit Digital, the company is moving 14,500 Bitcoin miners from China to the United States. This is due to the Bitcoin mining crackdown in China, forcing the company to relocate to other countries.

Crude oil

The crude oil market extended its bearish run on Thursday, 15th July 2021 as Brent Crude dropped below $74 per barrel during trading.

Brent Crude recorded a significant 1.97% decline to close at $73.29 per barrel, WTI dipped 2.02% to close at $71.65 while Natural Gas recorded a decline of 1.26% to close at $3.614.

In the same fashion Bonny Light also dipped 0.6% to close at $74.16 per barrel.

The bearish trade on Thursday came on the back of reports that OPEC+ members, Saudi Arabia and UAE had reached a compromise concerning its production. This is as the market assesses the prospect of higher crude oil supply in the global crude oil market.

Despite the bearish trade since the reported agreement, OPEC still projects global oil demand to exceed 100 million barrels per day in 2021. The projection was made based on the expectation of revived economic growth by world economies and continuous success in containing the virus.

Similarly. Goldman Sachs, a US investment bank has reiterated it stands that Brent Crude will hit $80 per barrel by the end of 2021.

External reserve

The foreign reserve of Nigeria recorded a boost of $6.76 million on Wednesday, 14th July 2021, to close at $33.1 billion.

Nigeria’s reserve had recorded a significant reduction in recent times, losing about $220.42 million month-to-date and $2.27 billion from January to date.

The change in tide to a positive is an indication of increased forex earnings, which would come as a relief for Nigeria, as an increase in external reserve will help Nigeria meet up with pent-up financial obligations.

The increase will also help serve as a relief for Nigeria’s exchange rate, which had been on a downturn lately, crossing the N500/$1 mark at the parallel market.

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