Naira Gains: Oil Price Tops $73 Per Barrel

Friday, 11th June, 2021: The exchange rate between the naira and US dollar closed at N410.8/$1 in the official Investors and Exporters forex window.

Naira appreciated against the US dollar on Friday, 11th June 2021 to close at N410.80 to a dollar as against N411.83/$1 recorded on the previous day, 10th June 2021, representing a N1.03 gain.

However, the naira remained stable at the parallel market, as it closed at N502/$1, while forex turnover increased marginally by 3.2% from $89.89 million to $92.78 million. Crude oil prices have also maintained strong performances as Brent Crude hit $73 per barrel in the early hours of Monday morning.

Trading at the official NAFEX window

The naira gained against the US dollar at the Investors and Exporters window on Friday to close at N410.8/$1, representing a N1.03 appreciation when compared to the N411.83/$1 that was recorded on the previous day.

• The opening indicative rate closed at N410.56 to a dollar on Friday, 11th June 2021, representing a 23 kobo gain when compared to the N410.79/$1 recorded on Thursday.
• Also, an exchange rate of N430 to a dollar was the highest rate recorded during intra-day trading, before it settled at N410.8/$1. It also sold for as low as N400/$1 during intra-day trading, the same as recorded in over a week.
• Forex turnover at the Investors and Exporters (I&E) window increased by 3.2% on Friday, 11th May 2021.
• Data tracked by Nairametrics from FMDQ showed that forex turnover increased from $89.89 million recorded on Thursday, 10th June 2021 to $92.78 million on Friday, 11th June 2021.

Cryptocurrency watch

The world’s most popular digital currency posted impressive gains on Sunday, 13th June 2021, recording a 9.19% increase to close at $38,809.27. This indicates a gain of $3.266.51 as of 11:59 pm on Sunday.

• Ethereum also posted a 5.78% growth to close at $2,503.75, while XRP gained 5.91% to close at $0.0049.
• On the other hand, the Director, Information Technology Department, Central Bank of Nigeria (CBN), Mrs Rakiyat Mohammed, stated at the banker’s committee meeting on Thursday, that the CBN would be launching a Central Bank Digital Currency (CBDC) before the end of 2021.
• The director made mention of the fact that about 80% of central banks in the world were looking into the possibility of issuing a central bank digital currency, and Nigeria could not be left behind.

Brent hits $73 per barrel

Crude oil prices maintained their strong momentum as Brent crude topped $73 per barrel, having recorded a 0.59% gain in the early hours of Monday morning.

• Bonny Light also gained 0.21% to trade at $72.08, WTI Crude gained 0.52% to trade at $71.28.
• This came on the back of the latest IEA monthly oil report, where they called on OPEC+ to increase production in order to counter higher demand in 2022.
• • The agency also claimed that, based on current global economic growth expectations, demand for crude oil and petroleum products would be reaching pre-COVID levels by 2022.
  • The agency, however, called for no more investments in oil and gas, as it is expected to hit net zero-emission levels by 2050.
  • Meanwhile, the ten largest public oil firms in the world reported a combined profit of $46 billion for Q1 2021, as a result of higher oil prices this year.

  External reserve

  Nigeria’s external reserve continues to plunge further, as it dipped by $40.79 million on Thursday, 10th June, 2021 to close at $34 billion.

• The decline represents a 0.12% reduction in Nigeria’s external reserve position and the lowest level since May 2020.
• A total of $1.37 billion has been lost in reserves year-to-date, while month-to-date loss stands at $222.33 million.
• The decline has persisted despite the gains recorded in the global crude oil price. Oil prices are already trading over $72 per barrel. This has however been attributed to the decline in crude oil sales, due to the effect of the covid-19 pandemic on the buying capacity of India, which is one of the world’s largest importer of oil.