Naira strengthens at NAFEX window as bitcoin slumps to $52k

The Naira gained against the US Dollar on Wednesday to close at N408.75/$1 at the I&E window.

Wednesday, 24th March 2021, the exchange rate between the naira and the US Dollar closed at N408.75/$1 at the Investors and Exporters window.

Naira gained against the US Dollar again on Wednesday to close at N408.75 to a dollar, representing a 0.26% gain compared to N409.8/$1 recorded on Tuesday.

However, in the parallel market, the naira remained relatively stable, as it closed at N486/$1, which is the same as recorded in the previous trading session.

Forex turnover increased marginally to $34.76 million, while Nigeria’s external reserve recorded the third consecutive increase, gaining $182.3 million in three days.

Trading at the official NAFEX window

Naira appreciated against the US Dollar at the Investors and Exporters window on Wednesday to close at N408.75/$1. This represents a N1.05k gain when compared to N409.8/$1 recorded on Tuesday, 23rd March 2021.

• The opening indicative rate closed at N408.98 to a dollar on Wednesday. This represents an 80 kobo gain when compared to N409.78/$1 recorded on Tuesday.
• Also, an exchange rate of N414 to a dollar was the highest rate recorded during intra-day trading before it closed at N408.75/$1. This represents the highest rate recorded in almost two weeks.
• It also sold for as low as N394/$1 during intra-day trading. A difference of N1 compared to N393 recorded in the previous day
• Forex turnover at the Investor and Exporters (I&E) window increased marginally by 5% on Wednesday, 24th March 2021.
• A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $33.11 million recorded on Tuesday, March 23, 2021, to $34.76 million on Wednesday.

Cryptocurrency watch

Bitcoin, the most priced and popular cryptocurrency in the world slumped by over 4.06%  to trade at $52,153.23 on Wednesday.

• The highly coveted digital currency lost about $2,208.34 in value, representing a decline of 4.06% in a single day.
• Ethereum also dipped by 5.75% on Wednesday to trade at $1,574.2 as of 11:52 pm on Wednesday.
• This came on the back of Jerome Powell’s comment on the risk attached to investing in bitcoins and other digital assets.
• Jerome Powell, who is the Chairman of US Federal Reserve had said the volatility of the crypto coins undermines their ability to store value, which is a basic function of money. He went further to state that bitcoin is not really useful as a store of value.
• Meanwhile, JMP Securities has predicted that “$1.5 trillion of incremental capital” could flow into bitcoin, an amount greater than the cryptocurrency’s current market cap.
• The firm sees more wealth management companies following Morgan Stanley’s example to offer bitcoin to their clients. “Around $30 trillion of assets in the U.S. retail wealth management industry currently do not have direct access to bitcoin

Brent Crude makes a rebound

Brent Crude oil gained $3.62 in Wednesday trade to close at $64.41 per barrel, representing a 5.95% gain in a single day after enduring a massive decline in the previous day.

• Oil prices had dropped as investors’ sentiments towards the resurgence of the covid pandemic increase and major European countries effect new lockdowns and others extend their lockdown.
• It is worth noting that Bonny Light gained 2.67% to close at $62.58 per barrel while WTI dipped 0.88%
• WTI closed at $60.64 (-0.88%), Brent Crude ($64.41), Bonny Light ($62.58), OPEC Basket ($62.27), and Natural gas ($2.497).
• Meanwhile, analysts believe that the OPEC+ will likely decide to keep oil production steady for another month.

External reserve gains $182.3 million three days

Nigeria’s external reserve increased by 0.08% on Tuesday, 23rd March 2021 to stand at $34.6 billion.

• This represents the third consecutive increase in three days, gaining a total of $182.27 million from $34.42 billion recorded as of March 18, 2021 to $34.6 billion as of 23rd March 2021.
• Nigeria’s reserve had lost $957.26 million year-to-date before recording increases in the past three days, which could be attributed to the recent gain in the global crude oil market.
• Nigeria will hope to continue in this trajectory, as the increase in foreign reserves indicates more foreign exchange to meet up with the nation’s demand.