Naira starts week at N411/$1 as oil price finally hits $70

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Naira depreciated against the US Dollar on Friday as it closed at N411 to a dollar at the NAFEX window as oil price rallies to $69.36 per barrel

Naira stabilizes at black market as CBN continues its intervention in forex market

On Friday 5th March 2021: The exchange rate between the naira and the US Dollar closed at N411/$1 at the Investors and Exporters window, where forex is traded officially.

Naira depreciated against the US Dollar on Friday as it closed at N411 to a dollar at the NAFEX window, representing a 1.11% decline when compared to N406.5/$1 recorded on the previous day.

Meanwhile, the naira remained stable against the dollar in the parallel market to close at N480/$1 on Friday, March 5, 2021. This was the same rate that it closed on the previous trading day (Thursday).

Forex turnover, however, increased by 25.3% on Friday to stand at $83.93 million compared to $66.99 million recorded on Thursday, while crude oil prices are edging closer to the predicted $70 per barrel in the global oil market.

▪︎Trading at the official NAFEX window

The Naira depreciated against the US Dollar at the Investors and Exporters window on Friday to close at N411/$1. This represents a N4.5 loss when compared to N406.5 recorded on the previous trading day.

  • The opening indicative rate closed at N412.5/$1 on Friday. This represents a N1.4 drop when compared to N411.1/$1 recorded on Thursday.
  • Also, an exchange rate of N415 to a dollar was the highest rate during intra-day trading before it closed at N411/$1. It also sold for as low as N392.5/$1 during intra-day trading.
  • Forex turnover at the Investor and Exporters (I&E) window rose by 25.3% on Friday, March 5, 2021.
  • According to the data tracked by Nairametrics from FMDQ, forex turnover increased from $66.99 million recorded on Thursday, March 4, 2021, to $83.93 million on Friday, March 5, 2021.

▪︎Cryptocurrency watch

The world’s largest cryptocurrency, Bitcoin gained 2.33% to trade at $50,044.64 as at 10.27 pm on Sunday, 7th February 2021. a come back from it severe dip recorded last week.

  • Meanwhile, Ether ETHUSD, the coin linked to the ethereum blockchain network, rose by 0.75% to $1,663.5 on Sunday, 7th March 2021.
  • Ether’s value has moved fast over the past 24-hours. After breaching above $1,500 towards the late hours of Friday, the asset managed to position itself above $1,600 within the next 24-hours.
  • Ethereum is currently pushing towards the $1700 mark at press time, while most altcoins are far-behind on the daily returns.
  • According to a recent report, Nigeria has seen about a 15% surge of activity in peer-to-peer transactions since the Central Bank of Nigeria issued a circular reminding financial institutions in Nigeria about the prohibition in crypto-related transactions.
  • Also, another report showed that Nigeria led Africa’s peer-to-peer transactions in the last 30 days, as it posted monthly P2P volumes of about $31 million, followed by the Kenyans and Ghana each posting about $12.1 million and $8.4 million respectively.

▪︎Oil prices edge closer to $70 per barrel

Brent Crude oil rose by 1.98% early Monday morning to close at $70.73 when compared to $69.63 recorded on the previous trading day.

  • Oil price has recorded a significant increase since Thursday after OPEC+ decided to hold off on easing production cuts for another month, surprising the oil market.
  • Oil prices have extended the gains recorded on Thursday after the OPEC+ meeting, as Brent Crude and WTI gained an additional 3% on Friday upon the 3% gain recorded in the previous day.
  • This comes close $70 per barrel, predicted by Goldman Sach earlier in the month of February 2021.
  • WTI Crude closed at $67.41 (2.00%), OPEC Basket $62.15 (+0.29%), Bonny Light $67.69 (+2.37%), and Natural Gas $2.701 (-1.64%).

▪︎External reserves persistent decline

Nigeria’s external reserve continued its decline as it dropped by 0.11% on Thursday, 4th March 2021 to stand at $34.88 billion compared to $34.92 billion recorded as of March 3, 2021.

  • This represents the lowest reserves position since December 8, 2020, when it stood at $34.84 billion.
  • The current reserves also represent a $495.98 million decline when compared to $35.37 billion recorded as of 31st December 2020.
  • Worthy of note is the fact that Nigeria’s external reserve has continued to record declines since the month of January despite the increase in the price of crude oil in the global market. This might be attributed to the CBN forex market intervention aimed at managing the country’s exchange rate volatility. (Nairametrics)
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