By Adedapo Adesanya

The Naira suffered a marginal decline against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, December 20 by 0.02 per cent or 30 Kobo to settle at N1,541.68/$1, in contrast to Thursday’s closing price of N1,541.38/$1.

This marginal slide came as the Central Bank of Nigeria (CBN) moved to alleviate some pressure by allowing Bureaux de Change (BDC) operators to access the official market for a period of 50 days.

The CBN in a notice on Friday said BDC operators would have access to FX at the official market from December 19, 2024, to January 30, 2025, with a weekly cap of $25,000, with transactions requiring upfront funding at prevailing rates and must follow a maximum of 1 per cent spread.

This development trails the launch of the CBN-backed Electronic Foreign Exchange Matching System (EFEMS) which began operations earlier this month and has led to a rebound in the value of the Naira across markets.

The system is expected to instantly reflect data on all FX transactions conducted in the interbank market and approved by the CBN, giving traders real-time prices and buy-sell orders data.

But against the British Pound Sterling, the domestic currency appreciated yesterday by N6.46 to trade at N1,929.77/£1 compared with the previous day’s N1,936.23/£1 and against the Euro, the Nigerian currency depreciated by N60.21 to quote at N1,597.64/€1 versus N1,537.43/€1.

In the parallel market, the Naira maintained stability against the greenback during the trading session at N1,650/$1.

As for the cryptocurrency market, it was bullish on Friday after a hawkish tone in this week’s FOMC meeting flipped market sentiment ahead of the new year.

The positive outcome came as inflation slowed in the US and offered respite to the market, with Cardano (ADA) growing by 9.3 per cent to trade at $0.9825, as Dogecoin (DOGE) grew by 8.2 per cent to sell at $0.3463, and Ethereum (ETH) gained 4.1 per cent to settle at $3,535.49.

Further, Litecoin (LTC) increased by 3.9 per cent to $104.94, Solana (SOL) jumped by 3.3 per cent to $199.76, Binance Coin (BNB) soared by 2.2 per cent to $690.84, Ripple (XRP) surged by 1.9 per cent to $2.36, and Bitcoin (BTC) advanced by 0.6 per cent to $98,654.80, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.

By Adedapo Adesanya

Oil prices rose marginally on Friday as markets weighed Chinese demand and interest rate-cut expectations after data showed cooling inflation in the United States.

Brent crude futures appreciated by 6 cents or 0.08 per cent to trade at $72.94 per barrel and the US West Texas Intermediate (WTI) crude futures expanded by 8 cents or 0.12 per cent to finish at $69.46 per barrel.

The US Dollar retreated from a two-year high after data showed cooling US inflation on Friday.

A weaker Dollar makes oil cheaper for holders of other currencies, while rate cuts could boost oil demand.

The annual increase in core inflation, excluding food and energy, slowed but remained well above the US Federal Reserve’s 2 per cent target at 3.1 per cent in November.

This came after Wednesday’s US central bank cut its benchmark overnight interest rate by 25 basis points to the 4.25 per cent -4.50 per cent range. It also forecasts only two rate reductions in 2025, in a nod to the economy’s continued resilience and still-high inflation.

The market remained concerned about the demand outlook, especially as it relates to China, the world’s largest oil importer.

Chinese state-owned refiner Sinopec said in its annual energy outlook on Thursday that China’s crude imports could peak as soon as 2025 and the country’s oil consumption would peak by 2027, as demand for diesel and petrol weakens.

There are also pressures from possible moves by the incoming administration of President Donald Trump.

He threatened to levy tariffs against the European Union (EU) if the bloc does not buy more oil and gas from the United States, in the latest economic warning from the US president-elect before his inauguration next month.

In a brief post on his Truth Social platform, Trump said he told the EU “that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas”.

More supply could also be affected next year as the G7 countries consider ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold.

Russia has circumvented the $60 per barrel cap imposed in 2022 following the invasion of Ukraine through the use of its “shadow fleet” of ships, which the EU and the United Kingdom have targeted with further sanctions in recent days.

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has granted Bureaux de Change (BDC) operators temporary access to the Nigerian Foreign Exchange Market (NAFEM), which is the official market, as part of efforts to further strengthen the Naira in the currency market.

The CBN in a notice on Friday said BDC operators would have access to FX at the official market from December 19, 2024, to January 30, 2025, with a weekly cap of $25,000.

Transactions require upfront funding at prevailing rates and must follow a maximum of 1 per cent spread.

The Naira traded at the spot market at N1,541.38/$1 based on computation on the Bloomberg BMatch system computed by FMDQ Securities Exchange Limited.

The CBN recently launched the Electronic Foreign Exchange Matching System (EFEMS) to build transparency in the system, but this excluded street forex hawkers. This initiative has fortified the value of the Naira against the US Dollar at the official market.

The platform, which became operational on December 2, 2024, has enhanced operational efficiency in Nigeria’s FX market, with banks mandated to be on the system to trade forex.

The EFEMS initiative, according to Mrs Omolara Duke, the CBN’s director of the financial markets department, was designed to ensure “transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations.”

Between December 2 when the new electronic trading platform commenced and December 19, 2024, the Naira recorded over N250 gain over the Dollar in the official FX market.

The CBN also issued comprehensive guidelines for the operations of the interbank foreign exchange (FX) trading system via EFEMS, pegging the minimum tradable amount at $100,000, with incremental clip sizes of $50,000.00, to promote transparency and efficiency in the FX market.

This development has forced currency speculators and illicit market operators to look elsewhere, pushing up demand to the parallel market and the BDCs.

To further ease the pressure on these unregulated markets, the CBN will allow BDCs to access the market with the hope of checking demand and further supporting the Naira.