Naira falls to a record ₦557/$1 on the black market as demand pressure worsens

The exchange rate between the naira and the US dollar closed at ₦412.08/1 US dollar in the official window of investors and exporters.

The naira strengthened against the US dollar on Tuesday, closing at ₦412.08 per $1, compared to ₦412.75 per $1 registered at the close of trading on Monday, September 13, 2021, a 0.16% increase.

The exchange rate in the parallel market fell again to a record low on Tuesday, closing at ₦557 for $1, compared with ₦550 for $1 recorded in the previous trading session. This represents a decrease of 1.3% and further increases the gap between the black

Naira falls, Black Market, Dollar to Naira

market and official rates.

The local currency collapsed by 7 points on the black market, reaching a new low after CBN's actions to redirect forex demand from the window as buyers try to buy scarce dollars.

Currency speculators take advantage of the vast difference in exchange rates between the official and black markets.

The pressure of demand for forex continued, despite an increase in the dollar supply by 8% in the official window.

Trading in the official NAFEX window

The exchange rate rose against the US dollar on Tuesday, September 14, 2021, and closed at ₦412.08, representing an increase of 67 kobos compared to ₦412.75 per dollar recorded on the previous trading day.

The estimated opening rate closed at ₦412.18/$1 on Tuesday, September 14, 2021, which is 28 kobos more than the ₦412.46/$1 registered on Monday, September 13, 2021.

The exchange rate of ₦414. 90 per dollar was the highest rate recorded during intraday trading before it settled at ₦412. 08 for 1 dollar, while it was sold at only ₦400 for 1 dollar during intraday trading.

Meanwhile, forex turnover in the Investors and Exporters (I&E) window increased by 8.2% on Tuesday, September 14, 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover increased from $161.82 million recorded on Monday to $175.10 million on Tuesday, September 14, 2021.

Cryptocurrency Watches

The largest and most popular cryptocurrency globally, Bitcoin, rose by 4.09% and traded at $47,044. 19 early on Tuesday evening.

Fidelity investments urged the US Securities and Exchange Commission to approve its Bitcoin exchange-traded fund at a closed meeting, listing the idea's advantages, which the regulator was in no hurry to accept.

The capitalization of the global crypto market increased to $2.07 trillion compared to the last day. However, the total volume of the crypto market jumped by as much as 23% to $135.74 billion.

The CoinDCX research group said that although Bitcoin has pulled back from the $50,000 level at the end of August, it is still in the development process and will soon revise its valuation as institutional and retail investors continue to include it in their portfolios.

The second-largest cryptocurrency by market capitalization, Ethereum, rose 3.34% to $3,400. 80 on Tuesday; in the same vein, XRP rose 1.79% to $1.09.

The Nigerian Commission on Economic and Financial Crimes chairman, Abdulrashid Bawa, touched upon the risk associated with Bitcoin and other cryptocurrencies for the global economy. According to him, many criminals now play a significant role in the cryptocurrency markets, adding that virtual currencies have become their preferred means of exchange.

The price of crude oil

Crude oil prices rose, Brent crude oil rose by 0.10% to $73.58 per barrel after falling earlier amid a more favorable demand forecast.

Oil prices rose to the highest level in 6 weeks early Tuesday, as the IEA said it expects a strong recovery in global oil demand since October, as well as to the fact that another storm threatens to cause disruptions in the oil industry in the US Gulf region.

WTI rose by 0.77% to $71.02 and then fell, and the price of Brent crude oil exceeded $74 per barrel, increasing by 0.78% for the day to $74.11.

Early on Tuesday morning, oil was supported by the forecast for the next few months in the International Energy Agency Oil Market Report. Which earlier in the day showed that the IEA expects global oil demand to recover with an increase of 1.6 million barrels per day in October and continue to grow until the end of the year after three consecutive months of decline due to the Delta option.

WTI rose by 0.62% to $70.90 per barrel, Nigerian Bonny Light crude oil rose by 0.98% to $72. In addition, the OPEC basket rose by 0.22% to $ 71.98, while natural gas rose by 1.01% to $5284 after rising earlier.

External reserve

Nigeria's foreign exchange reserve increased by $250 million and closed at $35.109 billion on Monday, September 13, 2021, compared to $34.859 billion recorded as of the previous day. The latest increase represents an increase in the country's foreign exchange reserves by 0.72%.

The reserve has now increased by $1.092 billion in September, reducing the annual loss to approximately $261 million, compared to $35.37 billion recorded as of December 31, 2020.

Meanwhile, according to recent reports, Nigeria's volume of foreign exchange reserves may grow to $40 billion by the end of September 2021. The recorded growth of the country's foreign exchange reserves may be a positive step towards achieving the projected goal.

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