Naira Overlooks Dwindling FX Supply, Gains at Official Market

By Adedapo Adesanya

It was a stronger outcome for the Naira as it appreciated by 0.5 per cent or N8.77 against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, November 1.

The exchange rate closed at N1,666.72/$1 during the trading day compared with Thursday’s closing rate of N1,675.49/$1 despite worsening supply in the market.

The Central Bank of Nigeria (CBN) has said the foreign exchange market will not depend on its intervention for supply and stability, indicating the stop of sales of Dollars to the market as it plans to improve supply organically without its intervention from time to time while maintaining balance in the market.

“While you might see us intervene from time to time, we are trying to ensure the market is not dependent on the intervention of the central bank.

“I think that we are looking at conditions that market return as much as possible to improve supply organically without the Central Bank having to put in money all the time,” the CBN deputy governor on economic policy, Mr Mohammed Abdullahi, disclosed this in a presentation on the sidelines of the World Bank/IMF meetings held in Washington, DC last week.

The value of forex transactions yesterday went down by 43.5 per cent or $72.41 million to $94.20 million from $166.61 million a day earlier.

However, the local currency slid on the Pound Sterling on Friday by N10.10 to settle at N2,157.25/£1, in contrast to the preceding session’s N2,147.15/£1 and against the Euro, it lost N23.43 to settle at N1,814.79/€1 versus the previous day’s N1,791.36/€1.

Business Post reports that in the parallel market, the Nigerian currency improved its value against its American counterpart by N20 during the session to quote at N1,730/$1 compared with the N1,750/$1 it was traded in the previous trading day.

In the cryptocurrency market, digital currencies closed higher on Friday despite the US government reporting a marked weakening in the labour market last month ahead of the US presidential election and Federal Reserve policy meeting, with 12,000 jobs added in October, according to the Nonfarm Payrolls report, well shy of expectations.