Naira Gains on Dollar as Inflation Hits 27.33%

By Adedapo Adesanya

The Naira appreciated at the Nigerian Autonomous Foreign Exchange Market (NAFEM) against the Dollar by 3.7 per cent or N31.23 to N818.99/$1 on Wednesday, November 15 from the previous day’s N850.22/$1 amid a further rise in inflation.

An improvement in the supply of foreign exchange (FX) to the spot market by 45.5 per cent or $33.59 million during the session to $173.51 million from the previous day’s $143.55 million supported the strengthening of the Nigerian currency, boosting investors’ confidence.

Yesterday, the National Bureau of Statistics said Nigeria’s inflation quickened to a new 18-year high of 27.33 per cent in October 2023 as higher living costs and a weaker Naira sent food and goods prices soaring.

This development may put pressure on the Central Bank of Nigeria (CBN) to raise interest rates when it convenes its first monetary policy committee meeting next week since July. The meeting scheduled for September was cancelled.

The lender is expected to lift interest rates for the ninth time in a row as it has already raised rates by 725 basis points since May 2022 to 18.75 per cent.

In the Peer-to-Peer (P2P) segment, the domestic currency appreciated against the American currency by N1 to sell at N1,113/$1 compared with Tuesday’s rate of N1,114/$1.

Also, in the parallel market, the local currency improved its rate against the US Dollar in the midweek session by N5 to quote at N1,135/$1, in contrast to the previous day’s value of N1,140/$1.

However, the Naira weakened against the Pound Sterling in the official market on Wednesday by N12.07 to close at N1,047.84/£1 compared with the previously traded rate of N1,035.77/£1 and against the Euro, it depreciated by N8.14 to finish at N911.27/€1 versus N903.13/€1.

Meanwhile, the crypto market rallied during the trading day, with Solana (SOL) growing by 13.2 per cent to $62.60 amid an ongoing rally in altcoins, as Binance Coin (BNB) rose by 3.1 per cent to $252.44.

Cardano (ADA) grew by 1.6 per cent to trade at $0.3683, Litecoin (LTC) appreciated by 1.2 per cent to $72.07, and Dogecoin (DOGE) expanded by 0.5 per cent to sell at $0.0743.

On the flip side, Ripple (XRP) dropped 2.6 per cent to trade at $0.6378, Ethereum (ETH) went down by 0.9 per cent to $2,012.83, and Bitcoin (BTC) declined by 0.2 per cent to close at $36,239.63, while Binance USD (BUSD) and the US Dollar Tether (USDT) traded flat at $1.00 each.