Naira falls across forex markets as cryptos dive further with huge sell-off

Naira falls across forex markets as cryptos dive further with huge sell-off

On the 21st day of May 2021, at the Importers and Exporters window, where forex is traded officially, the exchange rate between the Nigerian currency naira and the US dollar closed at N412/$1.

Signifying a fall in about 0.17% drop compared to the previous day Thursday which was recorded at N411.31/$1.

On the other hand, which is the parallel market, it was observed that they have been a slight depreciation in the Naira price closing at N485/$1 on Friday, May 21, 2021, representing a N1 drop when compared to the previous day which closed at N484/$1.

However, The massive sell-off of cryptocurrencies continued as the crypto market plunged despite supporting tweets from Elon Musk.

They have also been a continuous dip in Crude oil prices of about $70 per barrel recorded last week, currently trading at $65.15 (Brent Crude), after recording a decline of 2.23% on Thursday.

NAFEX window

As already explained above, at the Investors and Exporters window on Friday, the Naira currency depreciated against the US dollar to close at N412/$1, representing a 69 kobo decline when compared to the N411.31/$1 that was recorded the previous day.

• The opening indicative rate closed at N411.08 to a dollar on Friday, 21st May 2021, representing an 8 kobo drop when compared to the N411/$1 recorded on Thursday.
• An exchange rate of N415 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.08/$1. It also sold for as low as 394/$1 during intra-day trading.
• Forex turnover at the Investors and Exporters (I&E) window declined by 25.3% on Friday, 21st May 2021.
• Data tracked by Nairametrics from FMDQ revealed that forex turnover dropped from $120.08 million recorded on Thursday, 20th May 2021 to $89.72 million on Friday, 21st May 2021.

Cryptocurrency

On Sunday, Bitcoin which is the world’s largest cryptocurrency dropped by about 12% in the evening to close at $33,515.76, representing an over $4,550 drop within the last 24 hours.

• Bitcoin, the world’s most valuable cryptocurrency, is down by almost 50% from this year’s peak of $64,895.22 on April 14, as it suffered another sell-off that left it crashing.
• Similarly, Ether, the coin linked to the Ethereum blockchain network, dropped 11.47% to close at $2,074.14 on Sunday evening, losing $269.07 in the last 24 hours.
• Both Bitcoin and Ether, the second-largest crypto, have now lost half their value from all-time highs set last month.
• Tesla Inc. Chief Executive Officer, Elon Musk, tweeted on Saturday, in support of crypto but this failed to stop the selling pressure and the market plunge.

Crude oil

On Sunday, the was an increase in the price of Crude oil as oil stabilized after a volatile week with the Brent crude rising by 2.04% to close at $66.44.

• Oil benchmarks suffered their worst week in more than a month as the market considered the consequences of a potential nuclear deal that could lift U.S. sanctions against Iranian crude.
• Analysts suggest that the key to whether the potential rise in Iranian output upsets global inventory drawdowns is how early the country re-enters the oil market.
• Meanwhile, there have been reports that Nigeria has been struggling to sell some of its oil in the global oil market, due to the reduction in the buying capacity of India as a result of the covid upsurge.

• The decline in oil sales by Nigeria was also attributed to the increased exportation of light crude oil by the United States, which competes with Nigeria’s oil.
• WTI Crude rose by 2.65% on Thursday to close at $63.58, Bonny light rose by 0.74%, while Natural Gas dropped by 0.65% to close at $2.906.

Conclusion

at the Investors and Exporters window on Friday, the Naira currency depreciated against the US dollar to close at N412/$1, representing a 69 kobo decline when compared to the N411.31/$1 that was recorded the previous day.

Bitcoin which is the world’s largest cryptocurrency dropped by about 12% in the evening to close at $33,515.76, representing an over $4,550 drop within the last 24 hours on Sunday.

On the other hand, the was an increase in the price of Crude oil as oil stabilized after a volatile week with the Brent crude rising by 2.04% to close at $66.44.