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Market Digest Nigeria

Finance

Naira depreciates against the dollar

Naira falls at NAFEX window as dollar supply drops significantly by 78%

Naira depreciated against the dollar to close at N410.67/$ on Monday, 10th May 2021, representing a 34 kobo drop from N410.33/$1 recorded on Friday, 7th May 2021

Monday, 10th May 2021: The exchange rate between the naira and the US dollar closed at N410.67/$1 at the Importers and Exporters window, where forex is traded officially.

Naira depreciated against the US dollar to close at N410.67 to a dollar on Monday, 10th May 2021, representing a 34 kobo drop when compared to N410.33/$1 that was recorded on Friday, 7th May 2021.

Meanwhile, the naira remained stable at the parallel market as it closed at N483/$1. This was the same rate that was recorded on Friday, May 7, 2021, as the dollar supply dropped significantly by 77.7%.

Trading at the official NAFEX window

The naira depreciated against the US dollar at the Investors and Exporters window on Monday to close at N410.67/$1, representing a 34 kobo drop when compared to the N410.33/$1 that was recorded on Friday.

The opening indicative rate closed at N410.22 to a dollar on Monday, 10th May 2021, representing a 12 kobo gain when compared to the N410.34/$1 recorded on Friday.

Also, an exchange rate of N422 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.67/$1. It, however, sold for as low as N400/$1 during intra-day trading.

Forex turnover at the Investor and Exporters (I&E) window dropped significantly by 77.7% on Monday, 10th May 2021.

A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover declined massively from $146.52 million recorded on Friday, 7th May 2021 to $32.61 million on Monday, 8th May 2021.

Cryptocurrency watch

Bitcoin, the world’s most popular cryptocurrency, slumped by 5.29% as of Monday evening to trade at $55,682.55.

The world’s largest cryptocurrency continues to trade much lower than April’s high of $65,000, which came in anticipation of Coinbase’s direct listing on Nasdaq.

While Bitcoin has remained relatively stable, the altcoin market has flourished with the likes of Ethereum more than doubling in 16 days.

Recently, American multinational investment bank Morgan Stanley began offering BTC custody to clients. Goldman Sachs also recently announced that clients would be able to invest in Bitcoin.

Ethereum, the world’s second-largest cryptocurrency, surges above $4,000 for the first time ever as it traded at $4,213.46 before slumping to $3,897.09.

Crude oil price stalls

OPEC’s crude oil production is estimated to have increased to a 3-month high of 24.96 million barrels per day (BPD) in April.

Brent Crude dropped by 0.31% on Monday evening to close at $66.1 compared to its closing price of the previous day’s trading session.

The WTI dropped by 0.29% on Sunday to close at $64.73, Bonny light crude dropped by 0.16% to close at $66.71, while the OPEC basket dropped by 2.39% to close at $68.20.

Oil prices recorded a weekly gain against the backdrop of optimism over a global economic recovery, despite the Covid-19 crisis in India which is biting hard.

In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activities.

External reserve

Nigeria’s external reserve plunged for the 14th consecutive day on Friday, 7th May 2021 as it dropped by about $18 million to close at $34.72 billion.

The nation’s foreign reserve declined from $34.74 billion recorded as of Thursday, 6th May 2021 to $34.72 billion on Friday, representing a 0.05% decline.

Nigeria’s foreign reserve has dipped $537.36 million since 16th April 2021 to date.

Nigeria will hope to boosts its foreign reserve position as oil prices continue to rally high and the CBN extends its naira 4 dollar initiative.

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