Economy
Naira Crashes to N487/$ at Black Market After Emefiele’s Attack
By Adedapo Adesanya
The black market segment of the foreign exchange (FX) market may have reacted negatively to an attack from the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, on Tuesday.
The apex bank chief had described the parallel market as illegal, adding that it was a place where bribery and corruption thrive, urging genuine forex customer not to patronise traders at the platform because they would be supporting actions aimed to sabotage the economy.
“Parallel market and quote me is a tainted market in Nigeria, where people who desire to deal in illegal foreign exchange transactions including sourcing of FX cash for purposes of offering bribes, corruption, that is where they deal,” Mr Emefiele had said while addressing newsmen at the end of the two-day Monetary Policy Committee (MPC) meeting in Abuja.
On Wednesday, the value of the Naira against the Dollar at the black market depreciated by N4 apparently due to cautious trading as traders were being careful of the next action the government might want to take against them.
Recall that in 2016 and 2017, the local authorities used securities operatives to disrupt activities of forex traders at the parallel market in an attempt to control the exchange rate of the local currency against the foreign currencies.
Yesterday, according to information scooped by Business Post from some forex traders at the black market in Lagos, caution was the motto of the market and this caused an artificial scarcity, spiking the exchange rate to N487/$1 from N483/$1.
Also, the Naira lost N9 on the British Pound Sterling at the same market window on Wednesday to trade at N629/£1 versus N620/£1 of the preceding session while on the Euro, the Naira lost N5 to close at N575/€1 in contrast to N570/€1.
A similar scenario played out at the Investors and Exporters (I&E) segment of the FX market yesterday as the domestic currency depreciated by N7.75 or 2.01 per cent against the greenback to quote at N393.25/$1 in contrast to N385.50/$1 it was sold previously.
This was the heaviest lost recorded at the market window in a long time and it came despite the sharp decline in the demand for FX at the market segment at the midweek trading session as transactions worth $52.09 million were carried out in contrast to $163.87 million exchanged at the prior session, indicating a decline of 68.2 per cent or $111.78 million.
However, at the Bureaux De Change (BDCs) window, the Naira closed flat against the US currency at N386/$1, according to data from the Association of Bureaux De Change Operators of Nigeria (ABCON).
Likewise, at the interbank window, which is the official exchange rate platform of the central bank, the domestic currency traded flat against the greenback at N379/$1.
At the cryptocurrency market yesterday, the value of the Bitcoin (BTC) appreciated by 0.1 per cent to sell at N9,303,003.60. It was the only digital currency that gained during the session.
The value of Ripple (RPX) and Dash (DASH) depreciated by 7.8 per cent to sell at N308.90 and N52,040.01 respectively, Ethereum (ETH) fell by 6.3 per cent to N284,103.27, Litecoin (LTC) lost 7.1 per cent to sell at N40,912.60, the United States Dollar Tether (USDT) went down by 0.3 per cent to N490.72, while Tron (TRX) plunged by 5.6 per cent to trade at N16.92.
By Adedapo Adesanya
The Naira further slipped against the United States Dollar by N2.33 or 0.17 per cent to N1,364.88/$1 from N1,362.55/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, August 6.
In the same vein, the domestic currency weakened against the Pound Sterling in the official FX market by 71 Kobo yesterday to trade at N1,838.09/£1, in contrast to Wednesday’s value of N1,837.38/£1, but against the Euro, it gained 45 Kobo to close at N1,574.80/€1 compared with the previous day’s N1,575.25/€1.
At the GTBank FX desk, the Naira improved its value against the US Dollar by N4 on Thursday to quote at N1,369/$1 versus midweek”s rate of N1,373/$1, but at the parallel market, it remained unchanged at N1,400/$1.
The NAFEM interbank FX turnover jumped to $98.804 million on Thursday, up by more than 31 per cent from $75.357 million the previous day.
Similarly, the number of deals at the NFEM interbank increased to 106 from 82, confirming higher US Dollar flows at the official FX market.
Traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market will help ease demand pressure.
In the cryptocurrency market, major cryptocurrencies were mostly down as the Senate delayed a vote on the Crypto Clarity Act until at least September.
The bill, which would set out which U.S. regulator oversees which digital assets, needs 60 votes to pass, and it is unclear whether it currently has 50. Several Republican senators have said publicly they oppose it, and Democrats want stricter rules preventing President Donald Trump from profiting from crypto while in office.
Ripple (XRP) shrank by 2.5 per cent to $1.02, Solana (SOL) depleted by 1.5 per cent to $72.86, Binance Coin (BNB) fell by 1.4 per cent to $587.41, Dogecoin (DOGE) tumbled by 0.9 per cent to $0.0692, Bitcoin (BTC) decreased by 0.6 per cent to $64,344.69, and Ethereum (ETH) tumbled by 0.3 per cent to $1,902.03.
However, Cardano (ADA) appreciated by 7.7 per cent to $0.2025, and TRON (TRX) rose by 0.3 per cent to $0.3267, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Dipo Olowookere
Buying interest in consumer goods, energy and banking stocks further raised the Customs Street by 0.12 per cent on Thursday despite profit-taking in the insurance and industrial goods sectors.
According to data from the Nigerian Exchange (NGX) Limited showed that the banking index grew by 0.62 per cent, the consumer goods space rose by 0.15 per cent, and the energy counter increased by 0.06 per cent, while the insurance sector crashed by 0.93 per cent, with the industrial goods segment flat.
At the close of business, the All-Share Index (ASI) went up by 297.10 points to 245,209.34 points from 244,912.24 points, and the market capitalisation gained N191 billion to finish at N158.278 trillion compared with the previous day’s N158.087 trillion.
Eterna led the gainers’ log yesterday after it chalked up 10.00 per cent to settle at N36.30, ACA Capital improved by 9.63 per cent to N11.95, Legend Internet expanded by 9.52 per cent to N4.60, FCMB jumped by 8.55 per cent to N12.70, and Honeywell Flour surged by 7.98 per cent to N17.60.
On the flip side, Fortis Global Insurance led the losers’ chart after it shed 10.00 per cent to trade at N2.52, Ecobank declined by 9.99 per cent to N72.10, Chellarams depleted by 9.85 per cent to N11.90, Thomas Wyatt dipped by 9.83 per cent to N3.21, and UPDC slipped by 8.45 per cent to N3.25.
During the trading day, 531.8 million shares worth N20.5 billion exchanged hands in 44,826 deals compared with the 824.1 million shares valued at N25.5 billion transacted in 48,114 deals on Wednesday.
This indicated that the volume of trades was down by 35.47 per cent, the value of transactions depreciated by 19.61 per cent, and the number of deals decreased by 6.83 per cent.
The busiest stock for the session was FCMB, which traded 131.7 million units for N1.6 billion, First Holdco transacted 43.5 million units worth N6.0 billion, AVA Capital exchanged 36.3 million units valued at N432.0 million, Chams traded 36.3 million units sold 36.3 million units valued at N149.8 million, and Access Holdings ended with a turnover of 24.4 million units worth N638.8 million.
By Adedapo Adesanya
Brent crude rose by 3.83 per cent or $3.04 to $82.29 per barrel on Thursday after an information that an Iranian parliament committee was reviewing a bill that would ban US and Israeli vessels from the Strait of Hormuz.
Also, the price of the US West Texas Intermediate (WTI) crude futures went up by 81 cents or 1.05 per cent to $77.29 per barrel during the session.
Under the apparent draft, Iran would ban American and Israeli ships from transiting the strait. Other nations that have harmed Iran would not be allowed to transit until compensation is paid, according to the draft. Iran would impose penalties on violators equivalent to 20 per cent of the value of cargo aboard a ship.
Market analysts noted that crude traders remain focused on the US-Iran agreements, and the longer the delays, the more prices will fade back to the upside.
Iran has warned Gulf states that any new US attack on its territory would trigger attacks on critical energy infrastructure across the region.
Before the Iran conflict began in late February, about one-fifth of global daily oil and liquefied natural gas supplies flowed through the Strait of Hormuz.
Meanwhile, Yemen’s Houthis said they carried out missile and drone attacks on “Saudi deployments” in Marib and Hadramout in Yemen on Thursday. This has led to elimination of Saudi-aligned fighters as well as destruction of military camps, weapons depots and vehicles.’
Also, Iran and Oman appear to be close to agreeing on joint management of the Strait of Hormuz with Iran’s foreign ministry spokesman, Esmaeil Baghaei, saying the deal with Oman was “in the final stages.”
Saudi Arabia has slightly lowered the official selling price for its flagship Arab Light crude oil to Asia in September.
Elsewhere, a major oil refinery in Russia’s Yaroslavl region was on fire after a big Ukrainian drone attack. The President of Ukraine Volodymyr Zelenskiy said the country’s military had hit two Russian oil refineries – the Bashneft-Novoil refinery in the republic of Bashkortostan, and the Slavneft-Yanos refinery in the Yaroslavl region.
