- July 5, 2021
- Posted by: Ato
- Categories: Economics, Finance
The exchange rate between the naira the US dollar closed at N411.25/$1 at the Investors and Exporters window, where forex is traded officially.
Naira depreciated against the US dollar on Friday, having lost 55 kobo to close at N411.25/$1 compared to N410.7/$1 recorded on Thursday, 1st July 2021.
The local currency fell at the official market despite the dollar supply rising significantly by 128.2%.
Meanwhile, the naira was stable at the parallel market, as it closed at N503 to a dollar. This was the same that was recorded in the previous trading session. Also, Nigeria’s external reserve continues to plunge, as it heads to its lowest position in four years and a year-to-date decline of over $2 billion
Naira depreciated against the US dollar at the Investors and Exporters window at Friday’s trading session to close at N411.25/$1 as against the N410.7/$1 recorded at the end of trade on Thursday, 1st July 2021. This represents a 55 kobo drop.
- The opening indicative rate closed at N411.98 to a dollar on Friday, 2nd July 2021, this represents a 77 kobo drop when compared to the N411.21 to a dollar that was recorded the previous trading day.
- An exchange rate of N420.95 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.25/$1, while it sold for as low as N394/$1 during intra-day trading.
- Meanwhile, forex turnover at the Investors and Exporters (I&E) window rose significantly by 128.2% on Friday, 2nd July 2021.
- According to data tracked by Nairametrics from FMDQ, forex turnover increased sharply from $61 million recorded on Thursday, 1st July 2021 to $139.23 million on Friday, 2nd July 2021.
The world’s most popular and biggest cryptocurrency, Bitcoin, dropped by 0.87% on Sunday evening to close at $34,387.05
- Wealthy investors look to be making a comeback into the Bitcoin market, a blockchain metric that warned of a price drop in early May shows.
- The number of coins held by whale entities – clusters of addresses controlled by a single network participant holding 1,000 to 10,000 BTC – rose by over 80,000 to 4.216 million BTC on Friday, hitting the highest level since May.
- The tally remained largely unchanged on Saturday, according to data provided by Glassnode.
- Meanwhile, China continues its efforts to thwart Bitcoin mining within the country, forcing major mining operations to move overseas or shut down completely.
- Ethereum, the second-largest cryptocurrency by capitalization rose by 2.49% to close at $2,268.46.
- Despite the ban on crypto transactions in Nigeria, it appears Nigerians are still very much in the business of trading in cryptos and especially Bitcoin.
- According to a report from CoinDance, Nigeria traded a total of 60,215 Bitcoins worth over $566 million between 2015 and 2020, with many Nigerians now trading through P2P channels.
The crude oil market was bearish on Sunday evening, as Brent Crude recorded a 0.13% drop to close at $76.07 per barrel ahead of another round of critical OPEC+ discussions to break a stalemate over raising production, with tension rising over the weekend between two long-time allies.
- The United Arab Emirates on Friday blocked an OPEC+ deal that cartel leaders Russia and Saudi Arabia hashed out to increase output, demanding better terms for itself.
- After 2 days of bitter negotiations, and with the UAE the only holdout, ministers suspended the discussions until Monday, leaving markets in limbo as oil prices still remained above $76 a barrel.
- Meanwhile, higher crude oil prices have prompted cash-strapped U.S. refiners to look for alternative ways to maximize gasoline production during the peak of the summer driving season.
- Brent crude jumped more than 8% last month, capping a powerful first-half rally, aided by a steady demand recovery in key economies including the U.S, Europe and China.
- Vitol Group, the world’s largest independent oil trader, expects the crude rally to continue on the assumption any OPEC+ output hikes will fail to keep pace with growth in demand.
- WTI Crude also dropped by 0.16% to close at $75.04, Natural gas gained by 0.43% to close at $3,716, Bonny Light recorded a decline of 0.60% to close at $74.16 per barrel, while OPEC basket rose by 1.68% to close at $74.84
Nigeria’s external reserve declined by $44 million on Thursday, 1st July 2021 to stand at $33.28 billion. This represents a 0.13% decrease compared to the $33.324 billion recorded on Wednesday.
- Nigeria’s foreign reserve fell to its lowest position since October 2017, as its year-to-date decline surpasses $2 billion, while its monthly decline for June 2021 stood at $905.5 million. This is despite the recent bullish trend recorded in the global oil market.
- The decline can be attributed to a drop in inflows by foreign investors and a decrease in forex earnings due to a cut in crude oil export as a result of OPEC production quota, as well as the widening international trade deficit. This invariably puts a lot of pressure on the local currency.
- However, the expectation of an increase in the global demand for crude oil and the hope of a rise in production quota by OPEC could reduce the pressure on Nigeria’s external reserve.
- The CBN, which operates a managed float foreign exchange system, also periodically supports the currency using the external reserves, and a lower reserve is expected to affect the currency.