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Exchange Rate Falls At Official Window As Naira Continues Its Recovery At Black Market

Monday, 2nd August 2021: The exchange rate between the naira and the US dollar closed at N411.50/$1 at the official Investors and Exporters window.

Naira depreciated against the US dollar to close at N411.50/$1 on Monday, representing a 0.01% drop compared to N411.44/$1 recorded on the previous day.

Also, naira appreciated at the parallel market to close at N512/$1, having traded at N515/$1 the previous day. This represents a N3 gain when compared to the previous day’s rate.

The recovery is coming as the deposit money banks have started to implement CBN’s directive on forex in addition to competing to meet dollar demand.

Also, ABCON has assured it will continue to provide foreign exchange services despite the non-allocation of forex by the CBN.

Trading at the official I&E window

Naira depreciated against the US dollar at the Investors and Exporters window on Monday to close at N411.50/$1, representing a 6 kobo drop when compared to N411.44/$1 recorded on Friday.

The opening indicative rate also depreciated from N411.40/$1 recorded on Friday, 2nd August 2021 to close at N411.50/$1 on Monday.

An exchange rate of N412.25 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.50/$1, while it sold for as low as N405/$1 during intra-day trading.

Meanwhile, forex turnover at the Investors and Exporters (I&E) window rose by 18.3% on Monday, 2nd August 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover increased from $121.08 million recorded on Friday, 30th July 2021 to $143.20 million on Monday, August 2, 2021.

Cryptocurrency watch

The world’s most popular and largest cryptocurrency, Bitcoin, dropped by 2.10% in the early hours of Tuesday to close at $39,022.84 as the recent rally begins to cool.

Bitcoin pulled back to around $40,000 after climbing over the weekend to the highest levels since May, initially dropping by as much as 5.6% on Monday.

Other virtual coins including second-ranked Ether also fell as analysts suggested that profit-taking may be behind the declines.

Bitcoin traded as much as $42,606 on Sunday, the highest since May. It rallied almost 20% last week, the biggest increase in three months.

The token has been helped in recent weeks by supportive comments from billionaire Elon Musk and Ark Investment Management LLC’s Cathie Wood, as well as speculation over Amazon.com Inc.’s possible involvement in the cryptocurrency sector.

Also, scrutiny of the crypto market is intensifying. That includes a push by U.S. legislators for stricter rules on cryptocurrency investors to collect more taxes to fund a portion of a planned $550 billion investment into transportation and power systems.

Meanwhile, there seems to be a panic suddenly spreading among Bitcoin, Ethereum, BNB, XRP and Dogecoin Traders even as the market soars toward a $1.7 trillion price.

The second-biggest cryptocurrency by market capitalization, Ethereum, dropped by 0.26% to trade at $2,557.33.

Crude oil price

Crude oil prices remained above $71 a barrel as investors weighed the risk to consumption posed by the spread of the Delta coronavirus variant globally.

The Brent crude was down 3.33% on Monday to close at $72.90 per barrel while West Texas Intermediate was 0.2% higher after slumping 3.62% on Monday, the biggest losses in 2 weeks.

The highly infectious Covid-19 variant is forcing governments to reimpose or extend curbs, and investors are tracking an uptick in cases in the world’s biggest crude market, China.

Crude rallied strongly in the first half as the roll-out of vaccines allowed major economies to reopen, boosting oil demand and draining the glut built up during the initial wave of the pandemic.

The pace of gains slowed in July as the Delta variant began to pose a greater challenge, while the Organization of Petroleum Exporting Countries (OPEC) pushed ahead with restoring more output.

Saudi Arabia, Kuwait and the United Arab Emirates, 3 core OPEC oil exporters in the Middle East, boosted crude shipments to multimonth highs in July.

The WTI Crude dropped 3.62% on Monday evening to trade at $71.27 per barrel, Natural gas recorded a 1.33% gain in price to trade at $3.966. the Bonny Light traded in a positive region at $74.32 per barrel, representing a 0.27% gain.

External reserve

Nigeria’s foreign reserve increased by $22 million on Friday, 30th July 2021 to close at $33.403 billion compared to $33.381 billion recorded as of 29th July 2021.

Since the reserve started moving positively, it has gained over $309.1 million in just 12 days despite enduring a significant plunge in the previous months.

Recall that the Central Bank of Nigeria banned the sales of foreign exchange to Bureau De Change (BDC) operators in the country, due to reports of the operators’ illegal trading of the dollar, trading beyond the limit threshold of $5,000 and gradually dollarizing the Nigerian economy, according to the CBN governor.