Naira Value Strengthens as CBN Moves to Clear FX Backlog

By Adedapo Adesanya

The Nigerian Naira eased recent pressure against the US Dollar in the Investors and Exporters (I&E), black market, and the Peer-to-Peer (P2P) arms of the foreign exchange (forex) market on Tuesday, September 5 as the Central Bank of Nigeria (CBN) said it would clear unsettled FX backlog in two weeks.

At a press conference in Lagos on Monday, Mr Folashodun Shonubi, the acting governor of the CBN, said that a partnership between local banks and the CBN would help clear the current backlog of fx demand within the stipulated time frame.

He did not offer much information on the process to clear the unmet FX need, which is widely estimated at $10 billion.

The Naira appreciated on the greenback during the session by N2.90 or 0.39 per cent to N744.97/$1 from the N747.87/$1, according to data obtained from FMDQ Securities Exchange.

This strengthening of the Naira value was supported by a 14.8 per cent or $11.04 million decline in the value of FX transactions on Tuesday to $63.60 million from $74.64 million.

The story was not different at the parallel market as the local currency appreciated against the Dollar yesterday by N3 to sell at N920/$1 compared with the preceding day’s value of N923/$1.

Similarly, in the P2P window, the domestic currency improved its value against its American counterpart by N2 to trade at N924/$1, in contrast to Monday’s rate of N926/$1.

However, the Naira lost N12.91 against the Pound Sterling in the I&E segment of the forex market to quote at N948.26/£1 versus N935.35/£1 and against the Euro, it depreciated by N8.21 to end the session at N809.59/€1 versus N810.38/€1.

Meanwhile, the cryptocurrency market rebounded on Tuesday as traders returned from the US Labor Day celebration, bringing back some mixed sentiments with them. The global crypto market cap was down by 0.47 per cent at the time of writing.

Bitcoin (BTC) gained 0.2 per cent to close at $25,719.86, Ethereum (ETH) jumped by 0.5 per cent to $1,629.98, Solana (SOL) rose by 4.9 per cent to $20.27, Dogecoin (DOGE) expanded by 1.6 per cent to sell at $0.0639, and Cardano (ADA) improved by 0.9 per cent to $0.257.

On the flip side, Litecoin (LTC) lost 0.6 per cent to finish at $63.03, Ripple (XRP) dropped 0.3 per cent to close at $0.5045, Binance Coin (BNB) went south by 0.2 per cent to $214.32, Binance USD (BUSD) and the US Dollar Tether (USDT) slid by 0.01 per cent to $0.9999 apiece.