Exchange rate falls at official market as forex turnover drops by 83%

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Thursday, 29th July 2021: The exchange rate between the naira and the US dollar closed lower at N411.67/$1 at the official Investors and Exporters window.

Naira depreciated against the US dollar to close at N411.67/$1 on Thursday, representing a 0.02% fall compared to N411.6/$1 recorded on the previous day. 

On the other hand, naira appreciated the parallel market to close at N520/$1, having recorded a significant fall to N525/$1 on the previous day. The rate had dropped following the announcement of the ban placed on the sale of forex to BDC operators in Nigeria by the CBN Governor, Godwin Emefiele. 

READ: CBN to start printing currency for The Gambia – Emefiele

Trading at the official I&E window

Naira depreciated against the US dollar at the Investors and Exporters window on Thursday to close at N411.67/$1, representing a 7 kobo decline compared to N411.6/$1 recorded on Wednesday. 

  • The opening indicative rate however depreciated further from N411.5/$1 recorded on Wednesday, 28th July 2021 to close at N411.58/$1 on Thursday. 
  • An exchange rate of N413 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.67/$1, while it sold for as low as N387.67/$1 during intra-day trading.  
  • Meanwhile, forex turnover at the Investors and Exporters (I&E) window dropped by 83.5 million on Thursday, 29th July 2021 to $58.07 million. 
  • According to data tracked by Nairametrics from FMDQ, forex turnover declined from $352.07 million recorded on Wednesday, 28th July 2021 to $58.07 million on Thursday. 

READ: CBN Naira 4 Dollar Scheme; A subtle devaluation?

Cryptocurrency watch

The cryptocurrency market has been steady in the past 24 hours owing to the less volatile movement in the price of the flagship crypto asset, Bitcoin.

The world’s most popular crypto asset, as of the time of writing this article has dropped 0.68% to trade at $39,757.07 as of 6:10 am on Friday.

Meanwhile, it is worth noting that Bitcoin hit the $40,000 dollar mark on Thursday, and has posted impressive gains in the past few days as a result of the renewed confidence shown by the Q2 financial report of Tesla, which shows they have not sold their Bitcoin holdings.

On the other hand, Ethereum has gained 1.06% to trade at $2,409.03, XRP dropped 0.13% to trade at $0.7488.

READ: Naira falls at official window as external reserve declines to 4-year low

Crude oil price

Despite trading bullish on Thursday, the crude oil market is currently trading on the negative as Brent crude dipped 0.53% in the early hours of Friday morning to sell for an average of $75.65 per barrel.

Brent Crude had recorded a positive increase in price in the previous trading session, attributed to drawbacks from crude inventory recorded in the previous. It however has dropped from about $76.05 closing price yesterday to $75.65 per barrel as of 6:am on Friday.

In the same vein, WTI Crude dropped 0.62% on Friday morning to trade at $73.16 per barrel, Natural gas recorded a 1.97% drop in price to trade at $3.979. Meanwhile, Bonny Light traded in a positive region at $74.12 per barrel, representing a 1.55% gain.

The market rally continues despite oil demand concerns on the back of mounting fears regarding Covid-19’s Delta variant. Meanwhile, a positive performance in the crude oil market signals good news for Nigeria as most of our export earnings still come from the sales of crude oil.

External reserve

Nigeria’s foreign reserve increased by $23.3 million on Wednesday, 28th July 2021 to close at $33.36 billion compared to $33.33 billion recorded as of 26th July 2021.

  • Since the reserve started moving positively it has gained over $261.1 million in just 10 days despite enduring a significant plunge in the previous months.
  • Recall that the Central Bank of Nigeria banned the sales of foreign exchange to Bureau De Change (BDC) operators in the country, due to reports of the operators’ illegal trading of the dollar, trading beyond the limit threshold of $5,000 and gradually dollarizing the Nigerian economy, according to the CBN governor.



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