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The exchange rate falls at the official window as the dollar supply declines

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 The exchange rate between the naira and the US dollar closed at N411.75/$1 at the official Investors and Exporters window.

Naira depreciated against the US dollar on Tuesday,13th July 2021 to close at N411.75 to a dollar, representing a 0.06% decline compared to N411.5/$1 recorded on Monday, 12th July 2021.

Meanwhile, At the parallel market, the naira remained stable at N505/$1, the same as recorded since Friday, 9th July 2021. On the other hand, Nigeria’s external reserve dipped $11.79 million on Monday, 12th July 2021 to close at $33.09 billion.

Cryptocurrency watch

The crypto market traded negatively on Tuesday as investors lost $26.38 billion to large sell-offs, as the total market capitalization declined by 1.99% to close at $1.32 trillion.

  • Bitcoin also traded bearishly on Tuesday, recording a decline of 1.64% to close at $32,559.34.
  • In the same vein, Ethereum dipped significantly by 4.61% to close at $1,941.12. XRP dipped by 1.31% to close at $0.6215.
  • A recent On-Chain report by Glassnode shows that approximately 2,000 BTC, worth around $66 million at current market price flows out of the Bitcoin centralised exchanges on a daily basis.
  • Meanwhile, a Bitcoin wallet termed “Satoshi-Era” containing 791 BTC ($25.7 million at a current market price of $32,500) and that has not been active for almost 10 years recently got activated.

Trading at the official NAFEX window

Naira depreciated against the US dollar at the Investors and Exporters window on Tuesday to close at N411.75/$1 from N411.5/$1 recorded on Monday, 12th July 2021.

Crude oil price

The global crude oil market traded somewhat bearish on Tuesday, however, Brent Crude gained 1.77% to close at $76.49 per barrel.

  • On the other hand, WTI Crude dipped 0.13% to close at $75.15 per barrel, while natural gas remained flat. Bonny Light also dipped by 0.6% to close at $74.16 per barrel.
  • According to the EIA, global oil demand is estimated to have jumped by as much as 3.2 million barrels per day (bpd) in June 2021 to 96.8 million bpd.
  • The agency also opined that oil markets are likely to remain volatile until there is clarity on OPEC+ production policy. It also posits that volatility does not help ensure orderly and secure energy transitions – nor is it in the interest of either producers or consumers.

External reserve

Nigeria’s external reserve dipped $11.79 million on Monday, 12th July 2021 to close at $33.09 billion, having lost about $21.03 million Friday.

  • The forex reserve position continues to deplete despite crude oil price rally at the global crude oil market.
  • So far in July 2021, Nigeria’s reserve has lost a total of $235.56 million while its year-to-date loss stands at $2.29 billion.
  • A recent Nairametrics article revealed that Nigeria’s current account still remains in the deficit for the 9th consecutive quarters, characterised by huge trade deficits and less dollar inflows.
  • Nigeria needs to boost its foreign reserves to meet up with pent-up obligations.

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