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Naira crashes to record N502/$1 at the black market as forex speculation increases
Chike Olisahby Chike Olisah June 7, 2021Reading Time: 3 mins read
FOREX, Dollar scarcity worsens as exchange rate falls to N472/$1 at black market , Naira falls to N460/$1 as CBN intervention fails to contain speculation
Friday, 4th June 2021: The exchange rate between the naira and the US dollar closed at N410.75/$1 at the official Investors and Exporters window.
Naira appreciated against the US dollar on Friday to close at N410.75 to a dollar, representing a 0.04% gain compared to N410.9/$1 recorded on Thursday, 3rd June 2021.
However, the naira hit a record low, as it depreciated against the US dollar on Friday at the parallel market to close at N502 to a dollar. This represents a N3 drop when compared to the N499/$1 that was recorded on Thursday, June 4, 2021.
The local currency closed the week at the lowest in 7 months as speculations continue to affect operations at the forex market.Trading at the official NAFEX window
Naira appreciated against the US dollar at the I&E window on Friday, June 4, 2021, to close at N410.75/$1. This represents a 15 kobo gain when compared with the N410.9/$1 recorded on the previous day.
The opening indicative rate closed at N411.12/$1 on Friday, representing an 8 kobo drop when compared with the N411.04/$1 recorded on Thursday, 3rd June 2021.
An exchange rate of N428.27 to a dollar was the highest rate recorded during intra-day trading before it closed at N410.75/$1, while it also sold for as low as N400/$1 during intra-day trading.
Forex turnover at the Investors and Exporters (I&E) window rose by 64.07% on Friday, June 4, 2021.
Data tracked by Nairametrics from FMDQ revealed that forex turnover increased from $140.76 million recorded on Thursday, 3rd June 2021 to $230.93 million on Friday, 4th June 2021.
The world’s biggest and most popular cryptocurrency, Bitcoin, rose by 1.52% on Sunday evening to close at $36,163.87 after dropping earlier in the day.
Bitcoin and most other top cryptocurrencies fell earlier on Sunday on concerns that there might be a further crackdown on the industry in China.
According to pricing data from CoinGecko, Bitcoin and many others in the top 30 cryptocurrencies (excluding stablecoins) declined in the past 24 hours as of 12:20 a.m. in London on Sunday.
Chinese social-media service, Weibo, suspended some crypto-related accounts. When trying to view these accounts, a message pops up saying the accounts have been reported for violations of laws, regulations or Weibo rules.
Bitcoin is also struggling with technical levels, remaining below its 20-day and 200-day moving averages.
Ethereum rose by 4.26% on Sunday evening to close at $2,749.55.
Crude oil price
Crude oil prices dropped on Sunday evening with Brent crude closing at $71.86 per barrel after hitting a 2-year high about 2 days ago.On Sunday, 6th June 2021, Brent Crude recorded a marginal decline of 0.04% to close at $71.86.
Oil prices have been on the rise as OPEC+ succeeds in draining global inventories while successful vaccine programs give hope that the end of the global pandemic may be in sight.
This is also as oil demand recovery continues, countering concerns about a patchy Covid-19 vaccination rollout across the globe.
A robust rebound from the pandemic in the U.S., China and Europe has driven prices more than 40% higher this year, although the Covid-19 comeback across Asia is a reminder that the recovery will be uneven.
WTI rose by 0.04% to close at $69.65, the Bonny light crude rose by 1.39% to close at $70.99, the OPEC basket rose by 1.29% to close at $69.89 while natural gas closed at $3.109, representing a 0.39% increase.
Nigeria’s external reserve dropped by $28 million on Thursday, 3rd June 2021 to close at $34.191 billion, representing a 0.08% decline when compared to $34.219 billion recorded on Monday, 31st May 2021.
Nigeria’s foreign reserve has lost about $1.178 billion year-to-date, having recorded declines consecutively for 30 days.
The current position also represents the lowest level in over one year. The last time Nigeria’s foreign reserve position was this low was 7th May 2021, when it stood at $31.19 billion.
The decline persists despite the increase in global crude oil prices.
The decline can be attributed to a drop in crude oil export, due to the reduction in the purchase of Nigeria’s crude oil by India, which is a major importer of Nigerian crude, due to the outbreak of the second wave of the pandemic.