Economy
EXPLAINER: Real Reason for the Recent Sudden Rise in Naira to Dollar Rate at P2P
By Dipo Olowookere
On Friday, a few cryptocurrency exchange platforms like Kucoin, Bybit and others were in the news, especially on X, formerly known as Twitter, where they trended as a result of a sharp rise in the Naira to Dollar exchange rate.
Some persons were scared that the gains recorded recently by the Naira may begin to erode and began to call for the heads of these platforms like Binance, which was forced to stop its operations in Nigeria because of allegations of currency manipulation.
The company, Binance, and two of its employees have still not been cleared of the issues they have with the Nigerian government, which has arraigned them before a federal high court.
Yesterday, many claimed that some forex manipulators have rushed to the other crypto exchange apps to begin to fight back, blaming them for the recent fall in the value of the Naira in the parallel market.
Business Post reports that while the Nigerian Naira has witnessed a decline in its value against the US Dollar, not much has happened in the black market.
Though on Friday, the Naira lost 1.4 per cent or N15.91 to trade at N1,169.99/$1 compared with the previous day’s rate of N1.154.08/$1, and in the parallel market, it weakened by N30 against the Dollar to quote at N1,150/$1, in contrast to the preceding day’s exchange rate of N1,120/$1.
As earlier stated, the decline in the local currency was blamed on the trading of cryptocurrencies by some people, but this is entirely not true.
“You claimed that the Naira’s fall has nothing to do with trading cryptocurrencies, but the Naira has appreciated from N1,900 to N950 to the Dollar since FG banned Binance.
“Oga NSA (National Security Adviser Nuhu Ribadu), what you did for Binance, do for Bybit, Kucoin, and OKX; they moved from Binance to these platforms,” one of the commenters wrote.
Another wrote, “Since Wednesday, the Dollar has started to increase again at BDC. Here is why, the emergency lovers of Binance are back speculating on other P2P (peer-to-peer). They will keep adding N50, N50 every day until they take it back to N2,500, which was their initial plan and recoup their loss. CBN (Central Bank of Nigeria) act now.”
“On this issue, I reached out to a source in the relevant security agency and I was reliably informed that it has been flagged as imminent danger and it’s being looked into.
“I am told that they (security agency) may have to expend their hands to them, just like they did to Binance.
“I am told that the NSA (Nuhu Ribadu) has a keen interest in currency manipulation activities as a means of economic sabotage. This is all I am allowed to say for now,” another stated.
However, Business Post can say that the recent weakening of the Naira may have not been entirely caused by manipulators.
For those in the crypto landscape, who trade digital currencies with USDT, which is pegged at the Dollar rate, the recent rise in the value of the US currency against its Nigerian counterpart may have been caused by the Bitcoin halving, which happened on Friday.
Yesterday, Bitcoin (BTC), which is the world’s largest cryptocurrency, completed its fourth ever “halving,” a phenomenon that happens roughly every four years.
It is always anticipated that the value of this digital coin will increase after the halving and the quest to be part of it triggered the demand for USDT and the rise in the exchange rate at these cryptocurrency exchange platforms.
Crypto traders in Nigeria on these platforms had to cough out more Naira to buy the USDT, which was already in high demand because of the BTC halving.
Now that the process has ended, you should expect to see a downward trend in the price of USDT or Dollar in the P2P market in the coming days.
For further clarification, please hit the comment section below.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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