CBN’s $876m FX Auction Boosts Naira Value by 0.28%

By Adedapo Adesanya

The value of the Naira improved against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, August 7 by 0.28 per cent or N4.48.

Data showed that the exchange rate of the Naira to the Dollar closed at midweek at N1,596.52/$1 compared with the preceding day’s value of N1,601.00/$1.

This was influenced by the sale of foreign exchange (FX) worth $876.26 million to 26 authorised dealer banks a day earlier by the Central Bank of Nigeria (CBN) through a Retail Dutch Auction System (rDAS) in a bid to boost liquidity to tackle seasonal demands.

According to a statement by the Director of the Financial Markets Department at the CBN, Mrs Omolara Duke, the sale conducted on Tuesday was to stabilise the FX market and ensure effective price discovery, adding that the auction saw a total of $1.18 billion in bids from 32 authorised dealer banks.

This helped in the supply of forex in the spot market yesterday as the trades rose by 51.7 per cent or $32.02 million to $93.92 million from the $61.90 million recorded in the last trading session.

Also, the Naira gained against the Pound Sterling in the official market on Wednesday by N33.69 to settle at N2,021.37/£1 compared with the previous day’s N2,055.06/£1 and against the Euro, it appreciated by N26.99 to sell for N1,739.70/€1 versus N1,766.69/€1.

However, the domestic currency depreciated against the US Dollar in the black market on Wednesday by N10 to sell for N1,610/$1, in contrast to the preceding day’s N1,600/$1.

In the same vein, cryptocurrencies fell yesterday as recent volatility has created a climate of risk aversion, leading to widespread sell-offs.

Ethereum (ETH) dropped 5.4 per cent to sell at $2,328.20, Litecoin (LTC) went down by 4.6 per cent to $55.76, Binance Coin (BNB) fell by 2.9 per cent to $471.75, Bitcoin (BTC) slumped by 2.5 per cent to $54,944.01, Cardano (ADA) crumbled by 2.0 per cent to $0.3242, Solana (SOL) tumbled by 1.7 per cent to $143.24, and Dogecoin (DOGE) slipped by 1.7 per cent to $0.094.

However, Ripple (XRP) surged by 19.8 per cent to trade at $0.6078, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.