The naira appreciates in the forex market as the dollar supply increases considerably by 141%
Monday July 12, 2021: The exchange rate between the naira and the US dollar started the week on a positive note as it closed at N411.5 / $ 1 on the official forex market.
The naira appreciated against the US dollar on Monday, closing at N 411.5 per dollar, representing a gain of 0.06% from the N 411.75 / $ 1 recorded on Friday, July 9, 2021.
However, the naira maintained its stability in the parallel market to close at N505 / $ 1, the same as recorded on Friday July 9, 2020. Nigeria’s external reserve fell back after only two days of consecutive appreciation. He lost over $ 21 million on Friday, July 9, 2021.
Trading at the official NAFEX window
The naira appreciated against the US dollar at the Investors and Exporters window on Monday to close at N411.50 / $ 1 against N411.75 / $ 1 recorded at the close of trading on Friday July 9, 2021.
- The indicative opening rate also appreciated slightly, rising from N411.29 / $ 1 recorded on Friday to close at N411.25 / $ 1 on Monday.
- An exchange rate of 412.9 N to the dollar was the highest rate recorded in intraday trading before settling at 411.5 N / $ 1, when it was selling as low as 400 N / $ 1 during intra-day trading.
- Meanwhile, Forex turnover at the Investors and Exporters (I&E) counter increased significantly by 140.7% on Monday, July 12, 2021.
- According to data tracked by FMDQ’s Nairametrics, forex revenue increased from $ 73.99 million on Friday July 9, 2021 to $ 178.13 million on Monday July 12, 2021.
The crypto market started the day Tuesday on a negative note, dropping 0.13% indicating a loss of $ 1.42 billion in cap.
- However, the world’s most popular digital asset Bitcoin at 5:15 a.m. on Tuesday was trading at $ 33,120.64, indicating a gain of 0.05%, while Ethereum fell about 0.43% to trade at $ 2,026.15.
- The week before, Bitcoin investors panicked when U.S. Senator Elizabeth Warren, who chairs the Senate Banking Committee’s economic policy subcommittee, issued an ultimatum to the Security and Exchange Commission (SEC) for the cryptocurrency regulation. She gave Gary Gensler, the chairman of the SEC, until July 28 to answer questions regarding cryptocurrency regulation.
- As a result, this caused the asset class to drop below $ 33,000 over the week, but over the weekend the market rebounded on positive news of a further build-up from Whale.
- Meanwhile, despite the ban on crypto activities in Nigeria, the peer-to-peer bitcoin trading volumes increased in June 2021. According to data from P2P exchanges, the P2P trading volume in the country has reached a bit less than $ 38 million. .
Brent Crude rebounded in the early hours of Tuesday with a gain of 0.24% to trade at $ 75.34, while WTI Crude posted a gain of 0.27% to trade at 74.3 $ per barrel at 5:30 a.m. Tuesday.
- Oil prices fell about 1% on Monday amid concerns over the spread of covid-19 variants affecting the global economic recovery, which reduced demand for fuel to pre-pandemic levels.
- Additionally, Tokyo reimposed new lockdowns over concerns over covid infections ahead of hosting the Summer Olympics. This eased the recent uptrend in the global crude oil market.
- However, analysts have predicted that the spread and inventory levels suggest that oil prices may rise further.
Nigeria’s external reserve plunged $ 21.03 million on Friday, July 9, 2021 to close at $ 33.09 billion. This happened as a result of back-to-back gins recorded in just two days.
- The foreign exchange reserve position continues to be depleted despite rising crude oil prices on the world crude oil market.
- So far as of July 2021, Nigeria’s reserve has lost a total of $ 223.77 million while its year-to-date loss stands at $ 2.27 billion.
- It appeared that the initial rise in the price of crude oil had started to be reflected in Nigeria’s reserves, but it returned to its negative trend.
- Nigeria needs to increase its foreign exchange reserves to meet its pent-up obligations.