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Naira Declines Against Pounds Sterling, Euro But Unchanged Against U.S Dollar

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Naira - Investors King

The Nigerian Naira was unchanged against the United States Dollar at the Central Bank of Nigeria’s regulated exchange portal.

The Naira to Dollar exchange rate stood at N416.34, the same rate it exchanged on Friday and Monday. Against the Pounds Sterling, the Nigerian Naira dipped slightly from N548.5696 on Friday to N546.4879 on Monday.

Similarly, against the Euro common currency, the Naira traded at N454.0188, down from N452.6865. These are the rates the Central Bank of Nigeria (CBN) sells to Deposit Money Banks, the only approved institutions to buy and sell foreign currencies.

At the unregulated black market, the Naira remained pressured, trading at N570 to a United States Dollar in Ibadan.

Foreign Reserves

Nigeria’s foreign reserves declined by $70 million from $39.870 billion on Friday to $39.800 billion, according to the latest data from the Central Bank of Nigeria.

Despite the rise in crude oil to $133 per barrel, the foreign reserves continue to decline, largely due to the rising cost of landing finish petroleum products and the amount needed by the Federal Government of Nigeria to subsidize the products for its over 200 million population.

Africa’s largest economy and the biggest exporter of crude oil on the continent may not be able to take advantage of the current increase in crude oil prices as it still depends on imports for finished petroleum products.

Crude Oil

Brent crude oil, the international benchmark, rose to $133 per barrel on Tuesday after the U.S and U.K imposed sanctions on Russian oil imports.

President Biden had announced the United States will halt imports of Russian fossil fuels including oil. The United Kingdom on the other hand said it would ban Russian oil imports but will continue to allow natural gas and coal from Moscow.

The ban bolstered oil prices as experts believed the decision would worsen global supply, especially given the market is already struggling with supplies. OPEC and allies, together known as OPEC plus, can’t even meet their own targets. While the ongoing talks between Tehran and Washington might have slowed down after Russia demanded a written assurance that the revival of the U.S-Iran nuclear deal will not affect Moscow-Tehran trade relations.

Experts now believed Iranian crude oil may not hit the global market anytime soon, hence why they have started predicting $200 a barrel as early as March ending.

Cryptocurrency

The cryptocurrency market came alive on Tuesday evening after President Biden was said to be planning to sign an executive order outlining the U.S government’s plan for cryptocurrency space.

People familiar with the situation said the president will direct Justice Department, Treasury and other agencies to study the legal and economic ramifications of creating a U.S. central bank digital currency. This, the crypto community interpreted as positive for the crypto space.

Bitcoin gained 8.18% to $42,132 per coin. The Ethereum token (ETH) also appreciated by 6.33% to $2,754. Terra (Luna) gained the most in the last 24 hours, appreciating by 20.25% to $98.13 a coin.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Naira

Naira Exchange Rate Dips at Official Market and Black Market

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Naira - Investors King

The Nigerian Naira opened the week lower against the United States Dollar at the Investors and Exporters (I&E) foreign exchange window now adopted as the official forex window and also at the black market.

The local currency opened at N417.30 against the United States Dollar before declining by 0.60% to close the day at N421.50/$ at the I&E window. Forex traders at the window transacted forex worth $70.68 million on Monday.

For banks and international money transfer operators, the Central Bank of Nigeria buys US Dollars at N414.75 and sells at N415.75. The apex bank buys and sells Pounds Sterling N508.2761 and N509.5016, respectively. For the European common currency, the Euro, the central bank sold it at N433.0453 and acquired it at N432.0036 a unit.

At the parallel market popularly known as the black market, the Naira was exchanged at N599 for a United States Dollar in Abuja.

Speaking on why the exchange rate is that high, Abu Abdullahi, a currency trader at Zone 4 in Abuja, said demand for the U.S. Dollar is high despite persistent scarcity.

Crude Oil

Crude oil extended its gain in the early hours of Tuesday on optimism that China, the world’s largest importer of the commodity, would see substantial demand recovery after the latest data pointed to slowing COVID-19 infections in the hardest-hit areas.

Brent crude oil, the international benchmark for Nigerian crude oil, gained $2.69, or 2.4% to $114.24 a barrel at 5 am Nigerian time. The U.S. West Texas Intermediate (WTI) crude rose $3.71, or 3.4%, to $114.20 a barrel, Investors King understands.

“We are seeing a lot of signals that demand will start returning in that region, supporting higher prices,” said Bob Yawger, director of energy futures at Mizuho.

Cryptocurrency

Finally, Bitcoin and other cryptocurrencies shake off Luna-led decline to pare losses on Tuesday. Luna Foundation Guard (LFG) announced in the late hours of Monday that it was discontinuing Luna Coin and stablecoin (UST) operations to launch a new blockchain protocol that would focus on developers and building in general.

The announcement marked the end of one of the most promising cryptocurrency projects and once again reminds the world of how vulnerable the cryptocurrency space is — regardless of what creators say.

Bitcoin gained 1.99% to $30,366 per coin while Eth, a token of Ethereum, XRP (token of Ripple) and Solana appreciated by 3.15%, 3.25% and 4.39% to close at $2,084.27, $0.431744 and $55.86, respectively.

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Naira

Black Market: Dollar to Naira Exchange Rate Remains Under Pressure

1 dollar to naira today on the black market was N585 and purchased at N590 in Ibadan and Lagos

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Naira Exchange Rates - Investors King

The Nigerian Naira remained under pressure against global counterparts in the Nigerian unregulated parallel market, popularly known as the black market. $1 dollar to naira today on the black market was N585 and purchased at N590 in Ibadan and Lagos.

At the Investors and Exporters’ forex window, the Dollar to Naira exchange rate dipped by 0.24% to N419 from N417.70 it exchanged on Thursday.

For the interbank market, Investors King observed that the Nigerian Naira remained largely unchanged at N415.74 against the U.S. Dollar.

Cryptocurrency

Bitcoin to Naira exchange rate remained subdued as the uncertainty surrounding the cryptocurrency space surged to a  record-high following about a 99% plunge in the value of Terra Luna Coin and its stablecoin, UST.

Bitcoin to Naira exchange rate dropped by 1.49% in the last 24 hours to N17.859 million. While Eth, a token of the Ethereum protocol dipped by 0.34% to N1.232 million, down from about N2 million it traded a few weeks ago.

The uncertainty in the cryptocurrency space also dragged on the Binance coin (BNB) as the coin of the world’s leading cryptocurrency exchange platform moderated to N179,834 a coin, a 0.50% decline in its value.

Luna, the cryptocurrency that once again alerted the world to the vulnerability of unregulated space, is presently trading at N0.120 per coin, down from about N57,000 it was trading a week ago.

Crude Oil

Oil prices fell on Monday as the uncertainty surrounding China, the world’s second-largest economy,  continues to drag on the commodity outlook.

Brent crude, the benchmark for Nigerian crude oil dipped by 0.7%, or 72 cents to $110.83 per barrel at 11:45 am on Monday. While the U.S. West Texas Intermediate (WTI) oil fell by 0.5%, or 58 cents to $109.91 a barrel.

The decline was a result of the prolonged COVID-19 lockdown in china. China, the world’s largest importer of crude oil, is said to have instituted lockdown restrictions in about 46 cities to curb the spreading COVID-19.

However, this lockdown has started disrupting China’s economic activity as retail sales contracted by 11% while factory production dropped by 2.9% in the month of April.

Experts are now predicting that despite Russia’s sanction, crude oil prices could drop further if the Chinese lockdown persists.

 

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Naira

Shortage In Foreign Exchange As Naira Falls to N595 Against U.S. Dollar

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Naira to Dollar Exchange- Investors King Rate - Investors King

Amid the scarcity of Foreign Exchange (Forex) in the country, the Nigerian Naira on Monday extended its decline to N595 against the United States Dollar on the parallel market, popularly known as the Black market.

An analysis by Investors King revealed that last week, the Naira exchanged at N590 to a U.S. Dollar on Thursday on the black market before dropping in value to N595 on Friday, the same rate it exchanged on Monday. However, the Central Bank of Nigeria (CBN) has warned against patronising that section of forex.

In 2021, the CBN stopped allocating forex to Bureau de change operators after accusing them of aiding illegal forex flows, hoarding, and speculation. All forex allocations were then appropriated to the Deposit Money Banks (DMBs), presently being accused of the same things.

To plug forex leakages and challenges, the apex bank once again declared that it will stop appropriating forex to DMBs by the end of 2022 to spur its $200 billion forex repatriation program (RT200 FX Programme).

At the 2021 Banker’s Committee, the CBN governor, Godwin Emefiele announced the ‘RT200 FX Programme, which aims to increase forex inflow into the country from non-oil sources over the next three to five years.

“After serious consideration of the various possibilities, the CBN is launching the Banker’s committee ‘RT200 FX programme’, which represents the ‘Race to $200 billion FX repatriation’, ‘effective immediately, based on available choices and extensive engagement with the financial community”, Emefiele had said.

The RT200 program is a set of policies, strategies, and programs for non-oil exports that will allow Nigeria to achieve its ambitious but doable objective of $200 billion in FX repatriation, from non-oil exports over the next three to five years.

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