Home Markets Currencies
Naira gains at I&E window as foreign reserve falls to 1 year low
Samuel Oyekanmiby Samuel Oyekanmi June 3, 2021Reading Time: 3 mins read
Naira falls across forex markets as businesses resume after public holidays
Wednesday, 2nd June 2021: The exchange rate between the naira and the US dollar closed at N411.06/$ at the official Investors and Exporters window.
Naira appreciated against the US dollar on Wednesday to close at N411.06 to a dollar, representing a 0.23% gain when compared to N412/$1 recorded on Tuesday, 1st June 2021.
On the other hand, the exchange rate remained stable at the parallel market, as it closed at N498/$1 on Wednesday. This is, however, a N3 depreciation compared to N495 recorded as of Monday, 31st May 2021.
Also, Nigeria’s foreign reserve fell to its lowest position in over one year, as it dipped 0.03% from $34.23 billion recorded on Monday, 31st May 2021 to $32.22 billion on Tuesday.
Trading at the official NAFEX window
Naira appreciated against the US dollar at the I&E window on Wednesday, 2nd June 2021 to close at N411.06/$1.
The opening indicative rate, however, depreciated by 11 kobo to close at N411.22/$1 on Wednesday, as against N411.11/$1 recorded on Tuesday, 1st June 2021.
An exchange rate of N420.47 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.06/$1, while it also sold for as low as N381.5/$1 during intra-day trading.
Forex turnover at the Investors and Exporters (I&E) window increased by 69.2% on Wednesday, 2nd June 2021.
Data tracked by Nairametrics from FMDQ revealed that forex turnover increased from $96.91 million recorded on Tuesday, 1st June 2021 to $164 million on Wednesday, 2nd June 2021.
The crypto market ended on a bullish note on Wednesday, 2nd June 2021 as the entire crypto market capitalisation gained 3.75% to close at $1.672 trillion.
Also, the most popular cryptocurrency in the world, Bitcoin gained 2.88% to close at $37,750, adding $1,057.24 in a single day.
Ethereum gained 3.06% to close at $2,714.79, while XRP recorded a gain of 2.31% to close at $1.3229.
Recall that the highly sought-after crypto asset, Bitcoin, recorded a massive selloff in the previous month where it lost close to half its value in a matter of weeks.
Its price volatility also reached its highest in a year as the annualised 30-day volatility reached 116.62% by May 24th, which is the highest since April 10th.
Crude oil price
Crude oil continues to surpass the $70 per barrel mark as oil demand picks up.On Wednesday, 2nd June 2021, Brent Crude oil grew by 1.57% to close at $71.35 compared to $70.25 per barrel recorded in the previous day.
The growth was sustained on the back of the optimism expressed by the Joint Technical Committee of the OPEC+ concerning global oil demand.
OPEC+ officials met for a virtual meeting on Tuesday and reaffirmed their current plans to gradually increase production in July.
Also, The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories. It recorded a draw of 5.36 million barrels for the week ending 28th May 2021.
Bonny Light grew 1.45% to trade at $69.37, while natural gas closed at $3.071 $3.083, representing a 0.13% decrease.
Nigeria’s external reserve dropped by $9.96 million on Tuesday, 1st June 2021 to stand at $34.22 billion, representing a 0.03% decline when compared to $34.23 billion recorded on Monday, 31st May 2021.
Nigeria’s foreign reserve has lost about $1.15 billion year-to-date, having recorded declines consecutively for 29 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.
This is despite the positive growth recently recorded in the global crude oil market, as Bonny Light crude edges closer to the $70 per barrel mark.