Naira gains at official market despite drop in forex liquidity

Thursday, 26th August 2021: The exchange rate between the naira and the US dollar closed at N410.88/$1 at the Investors and Exporters window, where forex is traded officially.

Naira gained against the US dollar to close at N410.88/$1 on Thursday, representing a N1.12 appreciation compared to N412/$1 recorded at the close of trading on Wednesday, 25th August 2021.

On the other hand, naira depreciated further at the parallel market as it closed at N522/$1 on Thursday, 26th August 2021, representing a N1 fall compared to N521/$1 recorded in the previous trading day.

Nigeria’s foreign reserve recorded its first boost in over two weeks as it gained $82.52 million to close at $33.48 billion on Wednesday, 25th August 2021, while crude oil prices traded bearish on Thursday as Brent Crude lost 1.09% in price to close at $71.46.

Trading at the official NAFEX window

Exchange rate gained against the US dollar on Thursday 26th August 2021 to close at N410.88 to a dollar, representing a 0.27% appreciation compared to N412/$1 recorded in the previous trading day.

The opening indicative rate closed at N411.23/$1 as against N411.74/$1 recorded on Wednesday.

An exchange rate of N413 to a dollar was the highest rate recorded during intra-day trading before it settled at N412/$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 decreased by 18.2% on Thursday, 26th August 2021.

According to data from FMDQ, forex turnover dipped from $180.19 million recorded on Wednesday to $147.31 million on Thursday, 26th August 2021.

Cryptocurrency watch

The global cryptocurrency market closed in the reds at Thursday’s trading session, recording a 3.53% slump in market capitalisation as investors lost about $72.86 billion.

The bearish movement in the market was triggered by the significant decline in the value of the most valuable crypto asset, Bitcoin after recording a decline of 3.55% to close at $47,271.95.

In the same manner, Ethereum dipped 2.91% in price to close at 3,136.72 while XRP slumped by 6.32% to close at $1.10087.

Meanwhile, the year-to-date performance of Bitcoin stood at 63.22%, 6-month performance at –8.44% while in terms of 3-month performance, the crypto asset has grown by 36.57%.

Crude oil price

Brent Crude oil dipped 1.2% in price on Thursday to close at $71.38 per barrel. The commodity maintained its position above the $70 threshold despite the bearish sentiment in the market.

Similarly, West Texas Intermediate (WTI) also dipped by 1.38% to close at $67.42 per barrel on Thursday, 26th August 2021.

However, Natual gas and Bonny Light Crude closed the day on a positive note as both of them gained 7.36% and 0.83% to close at $4.184 and $69.62 respectively. OPEC Basket also recorded a 3.53% growth in price to close at $69.71.

External reserve

Nigeria’s foreign reserve recorded its first increase in over two weeks to close at $33.48 billion on Wednesday, 25th August 2021, compared to $33.39 billion recorded as of the previous day. The latest increase represents a 0.25% boost in the country’s foreign reserve.

In the same vein. The reserve level has also gained $79.19 million month-to-date compared to $33.4 billion recorded as of the beginning of the month.

However, its year-to-date change shows a $1.89 billion loss compared to $35.37 billion recorded as of 31st December 2021.

While recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021, the recent decline in the external reserve could be attributed to decline recorded in the global crude oil market in recent weeks.