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Naira remains stable at forex markets as oil prices edge near $75 per barrel

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Monday, 26th July 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 remained flat against the US dollar to close at N411.5/$1 on Monday, same as recorded on Friday, 23rd July 2021. In the same vein, naira remained stable at the parallel market to close at N504/$1, despite a marginal appreciation during intra-day trading.

Trading at the official NAFEX window

Naira remained flat against the US dollar at the Investors and Exporters window on Monday to close at N411.5/$1, the same as recorded in the previous trading session .

The opening indicative rate depreciated from N411.21/$1 recorded on Friday, 23rd July 2021 to close at N411.5/$1 on Monday.

An exchange rate of N412.2 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 marginally by 3.1% on Monday, 26th July 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover increased from $135.28 million recorded on Friday, 23rd July 2021 to $139.49 million on Monday, 26th July 2021.

Cryptocurrency watch

The crypto market started the week on a positive note on Monday, as the market capitalisation of the cryptocurrency industry gained $40.65 billion to close at $1.45 trillion.

The most popular crypto asset, Bitcoin also gained 4.69% on Monday to close at $37,090 representing an increase of $1,661.72 in one day. It however skyrocketed to as high as $38,500 during intra-day trading.

Similarly, Ethereum gained 1.77% to close at $2,232, XRP gained 3.11% to close at $0.6255 while Tether dipped 0.06% to close at $1.001.

Meanwhile, according to data from Bybt, a cryptocurrency futures trading and information platform, the cryptocurrency market recorded the highest liquidation in a single day since May 19 as the total amount of futures contract liquidation on centralized exchanges hit a record $1.14 billion.

The liquidation shows that a lot of futures traders were betting for the cryptocurrency market to go further down (sell-off), however, the crypto market was able to recover despite a bearish previous week.

Oil price set to recover to $75

Crude oil prices are set to recover from the bearish trade recorded in the previous week after the OPEC+ agreed on a gradual increase in production supply.

The market traded downwards in the past week as the prospect of increased supply grew in the market shrinking crude oil prices to as low as $70 per barrel.

On Monday, 26th July 2021 Brent Crude gained 0.54% to close at $74.5 per barrel. WTI also recorded a 0.31% increase in price, Bonny Light grew 1.27% to close at $72.8 per barrel. However, Natural gas recorded a decline of 0.07% to close at $4.099.

External reserve

Nigeria’s external reserve position grew by $23.26 million on Friday, 23rd July 2021 to close at $33.25 billion compared to $33.23 billion recorded as of Thursday, 22nd July 2021.

Nigeria’s foreign reserve is now moving towards an upward trajectory after immense pressure encountered in recent years, brought on by the effects of covid-19 on crude oil earnings, the decline in crude oil prices as well as the decline in diaspora remittances and foreign inflows amongst others.

A cursory look at the historic data obtained from the Central Bank of Nigeria shows that Nigeria boasted of an external reserve of as high as $45 billion as of this time in 2019, which has depleted by about $12 billion in the space of two years.

Meanwhile, the latest boost which has been sustained for seven days will come as good news for the Nigerian government and the Central Bank as a positive trend means increased forex and an improved exchange rate position for the naira.

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