The naira appreciated against the US Dollar on Wednesday, 31st March 2021 gaining for the fifth consecutive day at the NAFEX window to close at N408.67 to a dollar despite a 26.2% drop in dollar supply.
This represents a 0.08% gain, when compared to N409/$1 recorded on Tuesday, 30th March 2021.
However, the naira remained stable at the parallel market, closing at N486/$1, the same rate recorded on the previous trading day.
READ: Naira strengthened at black market as external reserve loses $437 million in 2 weeks
Trading at the official NAFEX window
The naira appreciated against the US Dollar at the Investors and Exporters window on Wednesday to close at N408.67/$1. This represents a 33 kobo gain when compared to N409/$1 recorded on Tuesday, 30th March 2021.
- The opening indicative rate closed at N409 to a dollar on Wednesday. This represents a 7 kobo gain when compared to the N409.07/$1 that was recorded on Tuesday.
- Also, an exchange rate of N412 to a dollar was the highest rate recorded during intra-day trading before it closed at N408.67/$1. It also sold for as low as N381/$1 during intra-day trading.
- Forex turnover at the Investor and Exporters (I&E) window dropped by 26.2% on Wednesday, 31th March 2021.
- A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined from $47.93 million recorded on Tuesday, March 30, 2021, to $35.37 million on Wednesday.
READ: Naira remains flat as external reserve fall to just 6 months of imports
Bitcoin, the most priced and popular cryptocurrency in the world gained 0.05% on Wednesday evening to trade above $58, 956.87 as it inches closer to the $60,000 mark.
- Goldman Sachs will reportedly jump on the bitcoin bandwagon as it will soon offer its private wealth management clients avenues to invest in bitcoin and other digital currencies.
- The decision by Goldman shows major financial institutions are beginning to embrace cryptocurrencies after years of scepticism over to their volatile nature.
- Bitcoin’s rally over the past few months has intrigued wealthy investors in a new way.
- European Central Bank President, Christine Lagarde said her institution could launch a digital currency around the middle of this decade if her fellow policymakers give the project the green light this summer.
- Ethereum also gained 2.18% to trade at $1,927.55 as of Wednesday night.
READ: Naira gains at NAFEX as oil prices record biggest single day loss in 11 months
Oil prices show contrasting movement
Oil prices recorded contrasting trading result on Wednesday with a drop by Brent crude while WTI crude rose during the day’s trading.
- Brent Crude as of Wednesday evening traded at $63.54 after France announced that it will start a month-long lockdown.
- OPEC+ has also expressed its concern about the strength of oil demand ahead of its meeting on Thursday, where a decision on output is expected to be taken.
- An OPEC+ panel advising the group has revised down its global oil demand forecast for 2021 by 300,000 barrels per day (BPD) due to the renewed lockdowns in Europe amid a third wave of the coronavirus pandemic.
- Meanwhile, despite recent signs of weakening oil demand as Europe grapples with a new wave of Covid-19 cases, analysts have said that the crude oil futures market structure still points to demand beginning to outpace supply in the second half of 2021.
- Brent crude dropped by 0.94% during intra-day trading on Wednesday while WTI Crude rose by 0.68% during the same period after it initially fell by $1.39 earlier in the morning.
- Brent ($63.54), WTI crude ($59.56), Bonny Light ($63.13), OPEC Basket ($63.37), and Natural Gas ($2.604).
External reserve rebound continues
Nigeria’s external reserve increased by 0.09% on Tuesday 30th, March 2021 to stand at $34.79 billion.
- This represents the seventh consecutive day increase, gaining a total of $370 million from $34.42 billion recorded as of March 18, 2021, to $34.79 billion as of 30th March 2021.
- Nigeria’s reserve had lost about $860 million year-to-date before recording increases in the past seven days, which indicates that the recent oil price rally is beginning to reflect in the country’s external reserve.
- It is important for Nigeria that the increase continues as it will help the Central Bank stabilise the exchange rate against other currencies and meet up with pent-up obligations due to the lockdown embarked on in 2020.