"Naira gains at official market as oil prices hit 3-year high"

" \n The exchange rate between the naira and the US dollar closed at N411.13\/$1 at the Investors and Exporters window, where forex is traded officially. \n \n\n \n Naira appreciated marginally against the US dollar on Monday, having gained 12 kobo to close at N411.13\/$1 compared to N411.25\/$1 recorded on Friday, 2nd July 2021. \n \n\n \n The local currency gained against the dollar at the official market as Brent crude sailed past $77 per barrel for the first time in about 3 years. \n \n\n \n Meanwhile, the naira was stable at the parallel market, as it closed at N503 to a dollar. This was the same rate that was recorded in the previous trading session. Also, Nigeria\u2019s 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. \n \n\n \n Trading at the official NAFEX window \n \n\n \n Naira appreciated against the US dollar at the Investors and Exporters window at Monday\u2019s trading session to close at N411.13\/$1 as against the N411.25\/$1 recorded at the end of trade on Friday, 2nd July 2021. This represents a 12 kobo gain. \n \n\n \n The opening indicative rate closed at N411.50 to a dollar on Monday, 5th July 2021, this represents a 48 kobo gain when compared to the N411.98 to a dollar that was recorded the previous trading day. \n \n\n \n An exchange rate of N420.86 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.13\/$1, while it sold for as low as N400\/$1 during intra-day trading. \n \n\n \n Meanwhile, forex turnover at the Investors and Exporters (I&E) window dropped by 48.6% on Monday, 5th July 2021. \n \n\n \n According to data tracked by Nairametrics from FMDQ, forex turnover declined from $139.23 million\u202frecorded on Friday, 2nd July 2021 to $71.55 million on Monday, 5th July 2021. \n \n\n \n Cryptocurrency watch \n \n\n \n The world\u2019s most popular and biggest cryptocurrency, Bitcoin, dropped by 1.35% on Monday evening to close at $33,939.58, resuming its losing streak after the weekend\u2019s positive performance. \n \n\n \n Bitcoin started off the week on the backfoot, dropping as much as 6.3% on Monday and was trading at $33,656 as of 3.15 pm in London after a recovery over the weekend proved fleeting. \n \n\n \n Strategists have cautioned that a break below the key $30,000 level could spell trouble, while a move toward or above $40,000 is seen as heralding further gains. \n \n\n \n Bitcoin has lost almost 50% from its mid-April high amid questions about its energy consumption sparked by Tesla Inc.\u2019s Elon Musk, as well as a clampdown from China. \n \n\n \n Must Read: European Bank for Reconstruction and Development ends all upstream oil financing \n \n\n \n Meanwhile, one of the most widely used charts for predicting massive future Bitcoin price gains is showing the largest divergence since January 2019. \n \n\n \n The Bitcoin stock-to-flow model currently suggests that the price of the flagship crypto-asset should be around $77,900 but as of Monday, it was trading at $33,939, well off the all-time high price of $64,829 reached in April. \n \n\n \n Ethereum, the second-largest cryptocurrency by capitalization rose by 0.85% to close at $2,283.89. \n \n\n \n Despite the ban on crypto transactions in Nigeria, it appears Nigerians are still very much in the business of trading in cryptos, especially Bitcoin. \n \n\n \n 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. \n \n\n \n Oil prices \n \n\n \n The crude oil market sustained its bullish performance on Monday evening, as Brent Crude sailed past the $77-mark closing at $77.48 per barrel, up by 0.41% with OPEC+ failing to hike oil production and delaying decisions again. \n \n\n \n The delay of the OPEC+ much-awaited resumption of talks on Monday indicates that Saudi Arabia and the UAE have not been able to broker an agreement after the UAE opposed production cut proposals as \u201cunfair\u201d and the Saudis responded with tariff amendments designed to hit at its political ally and economic rival. \n \n\n \n Although the UAE sees the need for higher production, the indefinite postponement of the meeting is a result of its disagreement with Saudi Arabia on how production should be split. \n \n\n \n The oil market will tighten and continue to draw down inventories for the rest of the year regardless of OPEC+ decision. \n \n\n \n Analysts and industry professionals say that this drawdown is largely due to OPEC+ offering less supply than the expected demand growth in the coming months. \n \n\n \n Meanwhile, an energy analyst, Vandana Hari, believes that the oil market is too optimistic about demand focusing a lot on surging US fuel demand and possibly ignoring the still lurking Covid-19 threats to demand elsewhere. \n \n\n \n WTI Crude was up by 2.04% to close at $76.69, Natural gas gained by 2.35% to close at $3,787, Bonny Light recorded a decline of 0.60% to close at $74.16 per barrel, while OPEC basket rose by 0.45% to close at $75.18. \n \n\n \n External reserve \n \n\n \n Nigeria\u2019s external reserve declined by $46 million on Friday, 2nd July 2021 to stand at $33.233 billion. This represents a 0.14% decrease compared to the $33.28 billion recorded on Thursday. \n \n\n \n Nigeria\u2019s 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. \n \n\n \n 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. \n \n\n \n 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\u2019s external reserve. \n \n\n \n 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. \n "

"Naira gains at official market as oil prices hit 3-year high"

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