Naira Crashes Further At Official Market As Demand Pressure Persists

Friday, 24th September 2021:  The exchange rate between the naira and the US dollar closed at N414.90/$1, at the official Investors and Exporters window.

Naira depreciated against the US dollar on Friday, to close at N414.90/$1, representing a 0.29% drop when compared to N413.68/$1 recorded on Thursday 23rd September 2021.

Meanwhile, the exchange rate at the parallel market closed at N575/$1 on Friday. This is according to information obtained by Nairametrics from BDC operators in Lagos.

The local currency dropped to a record rate at the official market as demand pressure hit the forex market despite a 10% improvement in dollar supply.

Activities of currency speculators and forex scarcity continue to hit the foreign exchange market as deposit money banks start to comply with the CBN directive to publish the names, BVN and account numbers of forex defaulters.

Trading at the official NAFEX window
The exchange rate fell significantly against the US dollar on Friday, 24th September 2021 to close the day at N414.90 to a dollar, representing a N1.22 drop when compared to N413.68/$1 recorded on Thursday, 23rd September 2021.

The opening indicative rate closed at N413.14/$1 on Friday, representing a 2 kobo drop when compared to N413.12/$1 recorded on Thursday, 23rd September 2021.

An exchange rate of N415.20 to a dollar was the highest rate recorded during intra-day trading before it settled at N414.90/$1, while it sold for as low as N400/$1 during intra-day trading, the same as the previous day.

Meanwhile, forex turnover at the official window rose by 10.08% on Friday, 24th September 2021.

According to data tracked by Nairametrics from the FMDQ, forex turnover increased from $175.86 million recorded on Thursday to $193.59 million on Friday 24th September 2021.

Cryptocurrency watch
The world’s largest and most popular cryptocurrency, Bitcoin, was up by 4.95% to trade at $44,165.58 as it continues its recovery from the drop recorded earlier last week.

Bitcoin has risen by 11.69% over the last one week with its market capitalization standing at $795.22 billion as of Sunday.

Bitcoin and other virtual currencies have been trading in the red for the last one week, thanks to the uncertainty emanating from  Evergrande’s financial crisis, which sent shockwaves across the markets in the world.

The prices of cryptocurrency acted with volatility as China’s central bank on Friday announced a ban on all cryptocurrency payments and services, escalating its ongoing clampdown on Bitcoin and other digital coins as it moves to roll out its own virtual currency.

The global crypto market cap is $1.87 trillion, a 2.10% decrease over the last day. The total crypto market volume over the last 24 hours is $94.71 billion, which makes a 29.85% decrease.

The second largest cryptocurrency by market capitalization, Ethereum, rose by 8.86% to trade at $3,130.71, while XRP rose by 4.76% to trade at $0.97

Crude oil price
Oil prices surged at the beginning of the week’s trading with Brent Crude rising by 1.43% to trade at $79.21 as of Sunday evening on signs that the crude market is tightening because of a global energy crunch.

West Texas Intermediate topped $75 a barrel after a run of five weekly gains, while Brent hit the highest level since October 2018.

Inventories have been drawing, with U.S. stockpiles near a three-year low. At the same time, a rally in natural gas looks set to drive demand for oil as users switch fuels.

Oil has surged more than 80% over the past year as worldwide demand recovers from the disruption caused by the pandemic. On the supply side, the Organization of Petroleum Exporting Countries and its allies including Russia have been easing output curbs only slowly, permitting markets to tighten.

WTI rose by 1.46% to close at $75.06 per barrel, Natural Gas rose by 3% to close at $5.294 on Sunday. The OPEC Basket rose by 1.32% to trade at $75.44 per barrel, while Nigeria’s crude, Bonny Light also rose by 0.86% to trade at $76.38 per barrel.

External reserve
Nigeria’s foreign reserve gained further by $135 million on Thursday, 23rd September 2021 to close at $36.089 billion compared to $35.954 billion recorded as of the previous day. The latest increase represents a 0.38% boost in the country’s foreign reserve and the highest level since February of the year.

The reserve has now gained $2.075 billion in the month of September 2021, while the recent gain puts the year-to-date gain at $714.77 million.

The recent increase in the reserve position, which has continued since the 25th of August is in line with recent reports suggesting that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021.

Although, hitting $40 billion seems unlikely but it’s a major step in the right direction especially with the oversubscription of the $4 billion Eurobond sourced by the federal government from the international debt market.