Naira appreciates across forex markets as dollar supply improves by 38%

The exchange rate between the naira and the US dollar closed at N410.33/$1 at the Importers and Exporters window, where forex is traded officially.

Naira appreciated against the US dollar to close at N410.33 to a dollar on Friday, 7th May 2021, representing a 67 kobo gain when compared to N411/$1 that was recorded on Thursday, 6th May 2021.

Also, the naira appreciated at the parallel market as it closed at N483/$1, representing a N2 gain when compared to N485/$1 that was recorded on Thursday, May 6, 2021, as forex market liquidity improved by 38%.

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters window on Friday to close at N410.33/$1, representing a 67 kobo gain when compared to the N411/$1 that was recorded on Thursday.

The opening indicative rate closed at N410.34 to a dollar on Friday, 7th May 2021, representing a 2 kobo gain when compared to the N410.37/$1 recorded on Thursday.

Also, an exchange rate of N437.41 to a dollar was the highest rate recorded during intra-day trading before it settled at N410.33/$1. It, however, sold for as low as N400/$1 during intra-day trading.

Forex turnover at the Investor and Exporters (I&E) window rose by 37.8% on Friday, 7th May 2021. A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $106.34 million recorded on Thursday, 6th May 2021 to $146.52 million on Friday, 7th May 2021.

Bitcoin, the world’s most popular cryptocurrency, slumped by 1.52% as of Sunday evening to trade at $57,951.21.

An amount of 12,354 bitcoins was recently withdrawn from Coinbase totalling over $700 million. The massive outflow could be related to institutional investors. Large financial institutions have started offering bitcoin custody services to their clients. 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 recorded a growth of 1.43% to close at $3,923.43, reaching an all-time high.

Meanwhile, payments giant Visa and financial services provider TALA have partnered to boost cryptocurrency adoption in emerging markets. This partnership is aimed at easing the process of converting, storing and using cryptocurrencies by underbanked consumers. Crude oil price stalls Crude oil prices moved towards $70 as the oil markets remain optimistic with strong bullish sentiments as summer approaches.

Brent Crude rose by 0.28% on Sunday evening to close at $68.28 compared to its closing price of the previous day’s trading session. The WTI rose by 0.29% on Sunday to close at $64.90, Bonny light crude dropped by 0.43% to close at $66.82, while the OPEC basket rose by 2.29% 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 activity.

Nigeria's external reserve plunged for the 13th consecutive day on Thursday, 6th May 2021 as it dropped by about $22 million to close at $34.74 billion.

The nation’s foreign reserve declined from $34.76 billion recorded as of Wednesday, 5th May 2021 to $34.74 billion on Thursday, representing a 0.63% decline. Nigeria’s foreign reserve has dipped $519.36 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.