The exchange rate between the naira and the US dollar closed at N411.50/$1 at the official Investors and Exporters window.
Naira depreciated on Wednesday against the US dollar to close at N411.50 to a dollar compared to N410/$1 recorded on Tuesday, 22nd June 2021.
The exchange rate remained stable for a second consecutive day at the parallel market to close at N500/$1 on Wednesday, June 23, 2021. This was the same rate that was recorded on Tuesday, June 22, 2021.
The fall of the local currency at the official window is further compounded by the persistent decline in Nigeria’s external reserves which is at a 4-year low at just over $33 billion despite rising oil prices.
The CBN Governor, Godwin Emefiele, at an event organized by Standard Bank of Africa, told investors in the UK, that he expects the true value of the naira to be between N430-440/$1 and not the black market rate of about N500/$1.
Trading at the official NAFEX window
Naira depreciated against the U.S dollar at the Investors and Exporters window on Wednesday to close at N411.50/$1, representing a N1.50 drop when compared to the N410/$1 that was recorded the previous day.
- The opening indicative rate closed at N411.15 to a dollar on Wednesday, 23rd June 2021, representing a 20 kobo drop when compared to the N410.95/$1 recorded on Tuesday, 22nd June 2021.
- Also, an exchange rate of N430/$1 was the highest rate recorded during intra-day trading, before it settled at N411.50/$1. It also sold for as low as N400/$1 during intra-day trading.
- Forex turnover at the Investors and Exporters (I&E) window rose by 14% on Wednesday, 23rd June 2021.
- Data tracked by Nairametrics from the FMDQ showed that forex turnover increased from $169.07 million recorded on Tuesday, 22nd June 2021 to $192.75 million on Wednesday, 23rd June 2021.
Cryptocurrency watch
The world’s largest and most popular cryptocurrency, Bitcoin, dropped by 3.60% to close at $32,560.86 on Wednesday evening, after hitting a 5-months low of close to $29,000 on Tuesday.
- The virtual currency had earlier during Wednesday trading, risen by as much as 5.8% to $33,821, a day after a dramatic rout briefly wiped out gains for the year.
- Bitcoin looks to have bottomed out, having digested most negative news during the recent sell-off from $41,000 to $29,000, according to an analyst.
- Prices topped $41,000 early last week before turning south in the latter half after the Federal Reserve’s unexpected hawkish tilt on interest rates.
- For the past month, Bitcoin has been trapped within a range of the mid-$30,000s, suggesting that the enthusiasm for digital assets is starting to fade.
- The second-largest cryptocurrency by market value, Ethereum was down by 4.98% on Wednesday evening to close at $1,909.63.
Crude oil
Crude oil continued its positive performance as it rose on Wednesday with the Brent Crude closing at $75.23 per barrel after dropping earlier in the day as shrinking inventories in the US and China added to bullish sentiment around the global demand recovery.
- Brent crude oil rose by 0.05% as of Wednesday evening, 23rd June 2021, to close at $75.23 per barrel.
- Oil prices jumped further after the Energy Information Administration reported a crude oil inventory draw of 7.6 million barrels for the week to June 18.
- This compared with a draw of 7.4 million barrels reported for the previous week and another draw, of 7.2 million barrels, that the American Petroleum Institute reported for the week to June 18, yesterday.
- Analysts had expected the EIA to report a crude stock draw of 3.625 million barrels for the period.
- The draw comes amid a slight faltering in the oil price rally as reports emerged that OPEC+ is considering returning more barrels to global supply from August in response to the strong rebound in demand.
- Oil may be facing some near-term turbulence, however, with one technical indicator signalling that prices may have climbed too far, too fast.
- WTI Crude rose by 0.04% to close at $73.11, Bonny Light gained 1.10% to close at $75.08 per barrel, OPEC Basket recorded a 2.19% gain to close at $73.13, while Natural Gas was down by 0.60% to close at $3.313 after initially recording some gains earlier in the day.
External reserve
Nigeria’s external reserve continued its slide on Wednesday, 22nd June 2021 as it dropped by $37 million to close at $33.634 billion.
- This represents a 0.11% decline compared to $33.671 billion recorded on Tuesday, 22nd June 2021.
- A total of $1.74 billion has been lost in reserves year-to-date, while month-to-date loss stands at $442.5 million.
- Nigeria’s forex reserve continues to trend downwards despite the positive rally recorded in the global crude oil market, with Brent crude currently trading at $75.23 per barrel.
- It is worth noting that India’s oil imports have started recovering after months of lessened activities due to the covid-19 pandemic’s effect on the country’s economy.
