FX Market Volatility Further Weakens Naira by 3.23% at NAFEM

By Adedapo Adesanya

The volatility in the foreign exchange (FX) market in Nigeria continued on Tuesday across the different segments of the market despite efforts of the Central Bank of Nigeria (CBN) to stabilise things.

The Naira depreciated against the United States currency yesterday by 3.23 per cent or N48.44 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) to trade at N1,548.76/$1 compared with the previous day’s N1,500.32/$1.

Equally, the domestic currency weakened against the Pound Sterling in the official market during the session by N9.43 to quote at N1,991.77/£1 versus N1,982.34/£1 and lost N3.31 against the Euro to finish at N1,673.02/€1 versus N1,669.91/€1.

During the session, the turnover of forex transacted in the spot market increased by 4.1 per cent or $11.04 million to $280.92 million from the $269.88 million recorded a day earlier.

Also, in the parallel market, the Nigerian Naira depreciated against the US Dollar by N15 during the trading day to settle at N1,585/$1, in contrast to Monday’s closing price of N1,570/$1.

The fall of the local currency happened as the apex bank raised key interest rates for the 13th time to curb inflation and bolster the nation’s battered currency.

The CBN’s Monetary Policy Committee (MPC) raised the benchmark interest rate by 50 basis points to 26.75 per cent, Governor Olayemi Cardoso said at a press briefing in the capital, Abuja, on Tuesday.

Meanwhile, the crypto market traded mixed yesterday as US spot Ethereum (ETH) exchange-traded funds (ETFs) debuted and recorded $106.7 million in net inflows on its first day of trading, with over $1 billion in trading volume.

Eight issuers sold their ETH ETFs to institutional investors and retail traders, with the token appreciating by 0.2 per cent to $3,442.54.

Litecoin (LTC) jumped by 1.7 per cent to sell at $71.96, Binance Coin (BNB) went up by 0.5 per cent to $583.16, and Ripple (XRP) improved by 0.3 per cent to $0.6.

On the flip side, Cardano (ADA) went down by 2.7 per cent to $0.4083, Dogecoin (DOGE) shed 2.4 per cent to $0.1306, Bitcoin (BTC) dropped by 0.9 per cent to trade at $65,806.06, and Solana (SOL) also slumped by 0.9 per cent to $172.29, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.