Exchange rate falls at forex markets despite boost in dollar liquidity

Tuesday, 15th June 2021: The exchange rate between naira and the US dollar closed at N411.75/$1 at the official Investors and Exporters window.

Naira depreciated against the US dollar on Tuesday to close at N411.75 to a dollar. This represents a 95kobo decline compared to  N410.8/$1 recorded on Friday, 11th June 2021.

Also, the naira depreciated at the parallel market to close at N505/$1 on Tuesday as against N502/$1 recorded on Monday, while Nigeria’s foreign reserve position slumped to its lowest in over two years. Forex turnover increased by 85.6% to stand at $172.24 million on Tuesday.

READ: Exchange rate falls at the NAFEX window as Nigeria’s external reserve dips $1 billion

Trading at the official NAFEX window

The naira depreciated against the US dollar at the Investors and Exporters window on Tuesday to close at N411.75/$1, representing a 0.25% decline when compared to the N410.8/$1 that was recorded on Friday last week.

• The opening indicative rate closed at N411.46 to a dollar on Tuesday, 15th June 2021 representing a 90 kobo decline when compared to the N410.56/$1 recorded on Friday, 11th June 2021.
• Also, an exchange rate of N420.97 to a dollar was the highest rate recorded during intra-day trading, before it settled at N411.75/$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 85.6% on Tuesday, 15th June 2021.
• Data tracked by Nairametrics from FMDQ showed that forex turnover increased from $92.78 million recorded on Friday, 11th June 2021 to $172.24 million on Tuesday, 15th June 2021.

READ: Indigenous firms contribute 30% to Nigeria’s gas reserves, 33% to crude oil reserves – DPR

Cryptocurrency watch

The crypto market traded bullish on Tuesday, 15th June 2021, recording a decline of 1.45% to close at $1.64 trillion.

• The highly sought-after crypto asset, Bitcoin, slumped by 1.31% to close at $40,000, while Ethereum dipped by 1.92% to close at $2,533.36.
• Meanwhile, Twitter’s Founder/CEO, Jack Dorsey has said that he is confident about the future of Bitcoin in Nigeria and believes Nigeria will lead the charge for the largest cryptocurrency despite the ban by the CBN.
• Also, a business software company MicroStrategy has filed an S-3 at the US Securities and Exchange Commission, stating that it would be launching an “at the market” securities offering which would allow it to sell up to $1 billion of its Class A Common stock over time.
• The firm stated that the net proceeds will be used for general corporate purposes, including the acquisition of Bitcoin.

Brent surpasses $74 per barrel

Crude oil prices have jumped on growing demand optimism as Brent crude trades over $74 per barrel, indicating a 32-month high.

• Brent Crude gained 1.84% on Tuesday to close at $74.2, while WTI recorded a gain of 1.75% to close at $72.12.
• The surge in crude oil price is largely attributed to increased demand for oil after a report from American Petroleum Institute (API) showed a substantial draw in US crude oil inventories.
• Meanwhile, Goldman Sachs said that Saudi Arabia is expected to hike its crude oil production to 10 million barrels per day, by the end of 2021, due to rising global oil demand.

External reserve

Nigeria’s external reserve continues to plunge further, as it dipped by $37.6 million on Friday, 11th June 2021 to close at $33.9 billion.