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Naira Crashes To Record N557/$1 At Black Market As Demand Pressure Worsens
Tuesday, 14th September 2021: The exchange rate between the naira and the US dollar closed at N412.08/$1, at the official Investors and Exporters window.
Naira appreciated against the US dollar on Tuesday, to close at N412.08/$1 as against the N412.75/$1 recorded at the close of trade on Monday, 13th September 2021, representing a 0.16% gain.
The exchange rate at the parallel market depreciated again to another all-time low on Tuesday to close at N557/$1 compared to N550/$1 recorded in the previous trading session. This represents a 1.3% depreciation and further widens the gap between the black market rate and the official rate.
The local currency crashed by N7 at the black market to hit a new low following CBN’s actions to channel forex demand away from the window as buyers scramble to buy the scarce dollars.
Currency speculators are taking advantage of the huge exchange rate difference between the official market and the black market.
The demand pressure for forex continued despite an 8% improvement in dollar supply at the official window.
Trading at the official NAFEX window
The exchange rate appreciated against the US dollar on Tuesday 14th September 2021 to close at N412.08 to a dollar, representing a 67 kobo gain compared to N412.75/$1 recorded in the previous trading day.
The opening indicative rate closed at N412.18/$1 on Tuesday, 14th September 2021, a 28 kobo gain when compared to N412.46/$1 recorded on Monday, 13th September 2021.
An exchange rate of N414.90 to a dollar was the highest rate recorded during intra-day trading before it settled at N412.08/$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 rose by 8.2% on Tuesday, 14th September 2021.
According to data tracked by Nairametrics from FMDQ, forex turnover increased from $161.82 million recorded on Monday to $175.10 million on Tuesday 14th September 2021.
Cryptocurrency watch
The world’s largest and most popular cryptocurrency, Bitcoin, was up by 4.09% to trade at $47,044.19 early on Tuesday evening.
The U.S. Securities and Exchange Commission has been urged by Fidelity investments to approve its Bitcoin exchange-traded fund in a private meeting, listing the virtues of an idea that the regulator has been slow to embrace.
The global crypto market cap inched up to $2.07 trillion compared to the last day. However, the total crypto market volume jumped as much as 23% to $135.74 billion.
CoinDCX Research team said that while Bitcoin pulled back from $50,000 level in late August, it is still being pursued and would soon be retaking its valuation as institutional and retail investors continue to incorporate it in their portfolios.
The second-largest cryptocurrency by market capitalization, Ethereum was up by 3.34% to trade at $3,400.80 on Tuesday; in the same vein, XRP was up by 1.79% to trade at $1.09.
The Chairman of Nigeria’s Economic and Financial Crimes Commission, Abdulrasheed Bawa has hit on the risk associated with Bitcoin and other cryptocurrencies to the world economy. According to him, many criminals now play significant roles in crypto-currency markets, adding that virtual currencies had become their preferred medium of exchange.
Crude oil price
Crude oil prices went up with Brent crude rising by 0.10% to trade at $73.58 per barrel after dropping earlier on brighter demand outlook.
Oil prices rose to their highest level in 6 weeks early on Tuesday as the IEA said it expects a strong rebound in global oil demand from October and as another storm threatened to cause disruptions to the oil industry in the U.S. Gulf area.
The WTI was up 0.77% at $71.02 before later dropping and the price of Brent Crude exceeded $74 a barrel, up by 0.78% on the day at $74.11.
Early on Tuesday, oil was supported by the outlook for the next few months in the International Energy Agency’s Oil Market Report, which showed earlier in the day that the IEA expects global oil demand to rebound with a 1.6-million-bpd increase in October and continue rising through the end of the year, after 3 consecutive months of declines due to the Delta variant.
The WTI was up by 0.62% to trade at $70.90 per barrel, the Nigerian headline crude, Bonny Light was up by 0.98% to trade at $72. Also, OPEC Basket was up by 0.22% to trade at $71.98, while Natural Gas was up by 1.01% to trade at $5,284 after rising earlier.
External reserve
Nigeria’s foreign reserve rose by $250 million to close at $35.109 billion on Monday, 13th September 2021, compared to $34.859 billion recorded as of the previous day. The latest increase represents a 0.72% boost in the country’s foreign reserve.
The reserve has now gained $1.092 billion in the month of September, reducing the year-to-date loss to about $261 million compared to $35.37 billion recorded as of 31st December 2020.
Meanwhile, recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021, the recorded growth in the country’s foreign reserve position could be a positive step towards hitting the projected target.
