Naira remains flat at forex market

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Naira remained flat against the US dollar to close at N411.5/$1 on Monday, same as recorded on Friday, 23rd July 2021.

In the same vein, naira remained stable at the parallel market to close at N504/$1, despite a marginal appreciation during intra-day trading.

The opening indicative rate depreciated from N411.21/$1 recorded on Friday, 23rd July 2021 to close at N411.5/$1 on Monday.

An exchange rate of N412.2 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.5/$1, while it sold for as low as N400/$1 during intra-day trading.

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According to data from FMDQ, forex turnover increased from $135.28 million recorded on Friday, 23rd July 2021 to $139.49 million on Monday, 26th July 2021.

Meanwhile, crude oil prices are set to recover from the bearish trade recorded in the previous week after the OPEC agreed on a gradual increase in production supply.

The market traded downwards in the past week as the prospect of increased supply grew in the market, shrinking crude oil prices to as low as $70 per barrel.

On Monday, 26th July 2021 Brent Crude gained 0.54 percent to close at $74.5 per barrel. WTI also recorded a 0.31 percent increase in price, Bonny Light grew 1.27 percent to close at $72.8 per barrel. However, Natural gas recorded a decline of 0.07 percent to close at $4.099.

Nigeria’s external reserve position grew by $23.26 million on Friday, 23rd July 2021 to close at $33.25 billion compared to $33.23 billion recorded as of Thursday, 22nd July 2021.

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Nigeria’s foreign reserve is now moving towards an upward trajectory after immense pressure encountered in recent years, brought on by the effects of covid-19 on crude oil earnings, the decline in crude oil prices as well as the decline in diaspora remittances and foreign inflows amongst others.

A cursory look at the historic data obtained from the Central Bank of Nigeria shows that Nigeria boasted of an external reserve of as high as $45 billion as of this time in 2019, which has depleted by about $12 billion in the space of two years.

Meanwhile, the latest boost which has been sustained for seven days will come as good news for the Nigerian government and the Central Bank as a positive trend means increased forex and an improved exchange rate position for the naira.