Naira Weakens to N1,331/$1 as Greenback Strengthens, FX Turnover Falls

By Adedapo Adesanya

The Naira slid against the United States Dollar by N1.81 or 0.14 per cent on Monday, September 28, to N1,331.32/$1 from N1,329.51/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM).

It was not different with the Pound Sterling in the same market window during the session, as the local currency lost N3.61 to close at N1,766.01/£1 compared with last Friday’s rate of N1,762.40/£1, but gained N2.72 against the Euro to sell at N1,512.79/€1, in contrast to the preceding session’s N1,515.51/€1.

Meanwhile, the domestic currency traded flat against the US Dollar in the black market yesterday at N1,370/$1, and at the GTBank FX desk, it traded flat at N1,336/$1.

FX turnover moderated sharply on Monday as trade volumes among banks and other financial institutions slowed.

Interbank turnover dropped by 77.7 per cent to $24.731 million, from $111.064 million on Friday. The number of deals executed at the interbank window fell to 37 from 108.

Market analysts from GTFund Managers expect that the Naira will be relatively stable even as the US Dollar remain stronger this week.

“We expect the US dollar to remain strong this week mainly due to the expectation of a policy rate hike, which will keep US fixed-income instruments attractive to foreign portfolio investors.

“Also, we expect the Naira to remain stable due to anticipation of improved FX inflows from oil receipts, capital importation and improved balance of trade,” it said in a note.

Also, the Central Bank of Nigeria (CBN) has shown the willingness to defend the currency as the external reserves neared $55 billion.

As for the cryptocurrency market, most digital coins were up even as rising Treasury yields and oil prices fueled inflation concerns and expectations of another Federal Reserve rate increase.

Rising inflation concerns and expectations of additional rate increases pushed Treasury yields to fresh multi-year highs, with both the 10- and 30-year yields climbing above 5 per cent.

Following the US central bank’s initial rate hike in three years earlier this month, the CME FedWatch Tool shows money markets are currently pricing in roughly a 70 per cent probability of another Federal Reserve rate increase in October.

On Monday, Ethereum (ETH) gained 2.2 per cent to trade at $2,707.28, Ripple (XRP) improved by 1.9 per cent to $1.50, Dogecoin (DOGE) expanded by 1.8 per cent to $0.0946, Cardano (ADA) appreciated by 1.3 per cent to $0.2484, and Bitcoin (BTC) grew by 1.0 per cent to $83,964.40.

Further, TRON (TRX) increased by 0.4 per cent to $0.3348, Solana (SOL) jumped by 0.3 per cent to $119.09, and Binance Coin (BNB) soared by 0.1 per cent to $763.96, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.