BREAKING: Naira Gains Significantly At Official Market

Naira has continued to gain at the official window despite a 2.4% drop in Dollar supply.

 

 

Newsonline reports that the exchange rate between the naira and the US dollar closed at N414.50/$1, at the official Investors and Exporters window. Naira appreciated against the US dollar on Tuesday, to close at N414.50/$1, representing a 0.08% gain when compared to N414.83/$1 recorded on Monday 27th September 2021.

 

Meanwhile, the exchange rate at the parallel market closed at N573/$1 on Tuesday. This is according to information obtained by Nairametrics from BDC operators in Lagos.

 

The naira gain at the official market continued despite a 2.4% drop in dollar supply. The local currency is still hitting record lows against the US dollar at the black market despite the news of Nigeria’s Eurobond sales which is meant to boost the nation’s external reserves. Nigeria, last week, sold $4 billion Eurobond after investors oversubscribed to the tune of $12.2 billion. The rise in the external reserve on the back of the Eurobond issue is likely to increase the CBN’s capacity to support the naira.

Trading at the official NAFEX window

The exchange rate appreciated against the US dollar on Tuesday, 28th September 2021 to close the day at N414.50 to a dollar, representing a 33 kobo gain when compared to N413.83/$1 recorded on Monday, 27th September 2021.

The opening indicative rate closed at N413.69/$1 on Tuesday, representing a 39 kobo drop when compared to N413.30/$1 recorded on Monday, 27th September 2021.

An exchange rate of N415 to a dollar was the highest rate recorded during intra-day trading before it settled at N414.50/$1, while it sold for as low as N405/$1 during intra-day trading, the same as the previous day.

Meanwhile, forex turnover at the official window dropped by 2.4% on Tuesday, 28th September 2021.

According to data tracked by Nairametrics from the FMDQ, forex turnover declined from $130.83 million recorded on Monday to $127.68 million on Tuesday 28th September 2021.

Cryptocurrency watch

The world’s largest and most popular cryptocurrency, Bitcoin, plunged by 3.43% to trade at $40,890.36,  much below its record of near $65,000 traded in April.

The market capitalization of Bitcoin stood at $798.43 billion and it has been reeling under distress in the last one week due to China’s housing finance company Evergrande’s crisis that sent shockwaves across global markets.

The volatility in the cryptocurrency market pushed the global crypto market cap to a level of $1.88 trillion, which is a  4.27% drop over the last day. The total crypto market volume over the last 24 hours is $97.25 billion, which makes a 14.76% decrease.

A factor that is fueling a sharp decline in the cryptocurrency market is the recent crackdown by China’s bank that has destabilized markets across the world

The second largest cryptocurrency by market capitalization, Ethereum, dropped by 3.24% to trade at $2,849.62, while XRP was down by 2.83% to trade at $0.906.

Crude oil price

Oil prices dropped on Tuesday as Brent oil dipped on Tuesday after topping $80 per barrel for the first time in nearly three years.

Brent crude was down by 0.55% to trade at $79.09 per barrel, as a five-day rally ran out of steam with investors locking in profits.

Oil benchmark prices have been on the rise recently, with fuel demand growing and traders expecting major oil-producing nations will decide to keep supplies tight when the Organization of the Petroleum Exporting Countries (OPEC) meets next week.

Energy commodities have rallied in recent days after the natural gas shortage in Europe went global with a ripple effect on gas, coal, and crude oil prices.

OPEC in its 2021 World Oil Outlook on Tuesday said that global oil demand is expected to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to continue with little or no change until 2045.

WTI dropped by 1.28% to trade at $74.33 per barrel, Natural Gas rose by 2.37% after dropping earlier on Tuesday to trade at $5,841. The OPEC Basket rose by 1.99% to trade at $77.73 per barrel, while Nigeria’s crude, Bonny Light also rose by 2.41% to trade at $78.22 per barrel.

External reserve

Nigeria’s foreign reserve gained further by $153 million on Monday, 27th September 2021 to close at $36.261 billion compared to $36.108 billion recorded as of the previous day. The latest increase represents a 0.42% boost in the country’s foreign reserve and the highest level since February of the year.

The reserve has now gained $2.172 billion in the month of September 2021, while the recent gain puts the year-to-date gain at $886.77 million.

The recent increase in the reserve position, which has continued since the 25th of August is in line with recent reports suggesting that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021.

Although, hitting $40 billion seems unlikely but it’s a major step in the right direction especially with the oversubscription of the $4 billion Eurobond sourced by the federal government from the international debt market.

 

Disclaimer:NEWSONLINE NIGERIA does not set or determine forex rates. The official NAFEX rates are obtained from the website of the FMDQOTC. Parallel market rates are obtained from various sources including online media outlets. The rates you buy or sell forex may be different from what is captured in this article.