The Nigerian naira weakened slightly against the U.S. dollar at the official NAFEX (Investors and Exporters) window on Thursday, closing at ₦411.31/$1, compared to ₦410.75/$1 recorded on Wednesday, May 19, 2021. This marks a 0.14% depreciation for the local currency.
However, the naira remained stable in the parallel market, maintaining its position at ₦484/$1, the same rate recorded the previous day.
Forex Turnover Declines by 8.4%
Foreign exchange turnover at the official market fell marginally by 8.4%, dropping from $131.16 million on Wednesday to $120.08 million on Thursday, according to data from FMDQ.
The opening indicative rate also slipped by 20 kobo, closing at ₦411/$1, down from ₦410.8/$1 the previous day. Intra-day trading saw highs of ₦421/$1 and lows of ₦386/$1 before settling at ₦411.31/$1.
Crude Oil Prices Dip Further
Crude oil prices continued to trend downward, with Brent Crude falling by 2.33% to $65.11 per barrel on Thursday, moving further away from the $70 mark earlier in the week.
The drop in global oil prices followed remarks by Iran’s president that world powers have agreed to lift sanctions, potentially increasing Iranian oil supply. In addition, Nigeria is facing challenges in selling its crude, largely due to:
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India’s reduced demand amid a COVID-19 surge.
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Increased competition from U.S. exports of light crude oil.
WTI Crude also dropped by 2.07%, closing at $62.05, while Natural Gas rose by 0.92% to $2.952.
Crypto Market Rebounds After Wednesday’s Crash
The cryptocurrency market rebounded sharply on Thursday, recovering from the massive sell-off witnessed midweek.
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Bitcoin surged by 10.17%, gaining $3,741.39 to close at $40,521.82.
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Ethereum jumped 15.65% to $2,829.85.
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XRP rose by 12.89% to $1.19724.
The overall crypto market capitalization increased by $216.96 billion, closing at $1.762 trillion, a 14.05% gain from the day before. However, most digital assets remain well below their previous highs.
Nigeria’s External Reserve Slides Further
Nigeria’s external reserves continued to decline, falling by $24.6 million on Wednesday, May 19, to close at $34.38 billion. This represents a 0.07% drop from the $34.4 billion recorded the previous day.
Since April 16, 2021, reserves have dipped by $876.1 million, and year-to-date, by $995.1 million. The continued drop persists despite rising oil prices and efforts by the Central Bank of Nigeria (CBN) to boost dollar inflow.
Analysts attribute the reserve decline to reduced oil demand from India, Nigeria’s top crude oil buyer, as the country grapples with a devastating COVID-19 wave.
