Naira Weakens to N1,402 at NAFEX as Confidence Wanes

By Adedapo Adesanya 

The official market of the foreign exchange (FX) market known as the Nigerian Autonomous Foreign Exchange Market (NAFEM) plunged on Thursday, May 2 after the Naira returned from the Workers’ Day holiday with 0.84 per cent or N11.71 loss against the US Dollar, closing at N1,402.67/$1 compared with Tuesday’s closing price of N1,390.96/$1.

Also, the domestic currency weakened against the Pound Sterling in the spot market yesterday by N213.34 to sell at N1,667.01/£1 versus the preceding day’s N1,453.67/£1 and against the Euro, it depreciated by N178.68 to trade at N1,425.71/€1, in contrast to the previous session’s value of N1,247.03/€1.

The loss suffered by the local currency occurred amid a slight improvement in the supply of forex to the system, as the value of transactions increased by 3.3 per cent or $7.48 million to $232.84 million from the $225.36 million reported on Tuesday (April 30).

The level at which the Naira is trading now points to weakening Foreign Portfolio Investments (FPIs) after appreciating to a level where the Naira was briefly touted as the best-performing currency globally based on foreign exchange reforms and policies by the Central Bank of Nigeria’s (CBN). Now, it appears to be returning to the N1,400 -N1,500 Per Dollar level spurred by waning confidence.

A look at the black market indicated that the value of the Nigerian currency declined against the greenback yesterday by N10 to settle at N1,390/$1 compared with the preceding session’s rate of N1,380/$1.

As for the cryptocurrency market, most of the benchmarked tokens tracked by Business Post finished in the green territory, with Solana (SOL) growing by 7.0 per cent to $139.00, and Dogecoin (DOGE) appreciating by 5.7 per cent to $0.1333.

Further, Bitcoin (BTC) rose by 3.3 per cent to $59,436.13, Binance Coin (BNB) increased by 2.8 per cent to $563.31, Ethereum (ETH) jumped by 2.5 per cent to $2,986.85, Cardano (ADA) moved up by 2.0 per cent to $0.4533, Ripple (XRP) hopped by 1.7 per cent to $0.5192, and Litecoin (LTC) advanced by 0.8 per cent to $84.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.