Naira falls at NAFEX window as Bitcoin rises above $63,000, an all-time record high

The exchange rate between Naira and the US Dollar closed at N411/1$ in the Importers and Exporters window, where forex is traded officially.

Naira depreciated against the US Dollar at the NAFEX window on Tuesday to close at N411/$1. This represents a 0.31% drop when compared to N409.75/$1 recorded on Monday, as the world’s largest cryptocurrency, Bitcoin hits an all-time high rising above $63,000.

Meanwhile, the naira remained stable against the dollar at the parallel market on Tuesday, 13th April 2021 to close at N482 to a dollar, the same rate that was recorded on Monday, April 12, 2021.

Trading at the official NAFEX window

Naira depreciated against the US Dollar at the Investors and Exporters window on Tuesday to close at N411 to a dollar. This represents a N1.25 drop when compared to N409.75/$1 recorded on Monday, 12th April 2021.

The opening indicative rate closed at N409.58 to a dollar on Tuesday. This represents a N1.30 gain when compared to N410.88/$1 recorded on Monday.

Also, an exchange rate of N436.81 to a dollar was the highest rate recorded during intra-day trading before it closed at N411/$1. It also sold for as low as N400/$1 during intra-day trading.

Forex turnover at the Investor and Exporters (I&E) window dropped by 18.04% on Tuesday, 13th April 2021.

A cursory look at the data tracked by Nairametrics from FMDQ showed that forex turnover increased from $45.35 million recorded on Monday, April 12, 2021, to $53.53 million on Tuesday, April 13, 2021.

Cryptocurrency watch

The world’s most popular digital currency, bitcoin, hit an all-time high above the $63,000 mark, extending its 2021 rally to new heights a day before Coinbase’s share listing in the United States.

Bitcoin closed at $63, 625.50 with several analysts feeling bullish, with price targets at $70,000 or higher by next month.

Risks remain, as some analysts choose to wait for confirmation of the breakout in price charts, especially as bullish positioning reaches extreme levels in the futures market.

The world’s biggest cryptocurrency, which has growing mainstream acceptance as an investment and a means of payment, rose by over 5% on Tuesday. Smaller rival Ethereum also reached a record high of $2,336.75.

Major firms including BNY Mellon, Mastercard Inc and Tesla Inc are among those to have embraced or invested in cryptocurrencies.

The digital currency has been widely adopted by many, replacing gold as the global digital-reserve asset.

Meanwhile, exchange tokens, such as Binance Coin, are seeing their value rise ahead of Coinbase’s public debut as well. Binance Coin, known as BNB, rose 23% on Monday, according to CoinMarketCap.com. Huobi Token and KuCoin Token, among others, also gained.

Oil price gain

Brent crude oil price rose on Tuesday as it closed at $64.08 per barrel, indicating a 1.68% increase compared to $63.02 recorded at the close of trade on Monday on signs of US inventory drawdown.

Oil extended gains in Asian trading after an industry report pointed to another decline in US crude stockpiles that followed an upbeat assessment of the demand outlook from OPEC.

The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 3.608 million barrels for the week ending April 9. Analysts had predicted a draw of 2.889 million barrels for the week.

OPEC boosted its consumption forecast for this year and predicted the market recovery will continue.

The latest data from the Energy Information Administration says that while inventories of crude oil are falling, U.S. oil production slipped from 11 million BPD to 10.9 million BPD during the week ending April 2.

Brent Crude closed at $64.08 (+0.64%), WTI Crude closed at $60.62 indicating 0.73% gain, Bonny Light, $62.56 (+0.58%), OPEC Basket (+0.52%) to close at $61.46 while Natural gas rose by 0.23% to close at $2,625.

External reserve

Nigeria’s external reserve gained $102 million on Monday, 12th April 2021 to close at $35.138 billion, being the highest external reserve position recorded in over a month.

This indicates a 0.29% increase when compared to $35.036 billion recorded on Friday, 9th April 2021.

It also represents an increase in the country’s external reserve position for the 15th consecutive day, having endured a significant downturn earlier in the year. Nigeria’s reserve has added a total of about $722 million in 15 days.

This recent increase in Nigeria’s external reserve could however be attributed to the increase in crude oil prices recorded earlier in March before the recent bearish trade in the crude market.

It could be attributed to the possible increase in diaspora remittance as the CBN offers incentives for every unit of a dollar received in Nigeria from diaspora remittance.

The external reserve is likely to get a further boost, as the Federal Government recently announced plans to issue $500 million Eurobonds for 2021.