Panic as Naira Crashes to N422.07/$1 at I&E

By Adedapo Adesanya

Things are gradually becoming difficult at the foreign exchange (forex) market in Nigeria as the supply end of the curve continues to face liquidity crisis.

This has already posed a threat to traders and FX users at the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX), which serves the Investors and Exporters (I&E) end of the market.

On Thursday, the Naira crashed by N6.97 or 1.68 per cent against the United States Dollar at the market segment to settle at N422.07/$1 in contrast to the preceding session’s N415.10/$1.

This development caused panic at the FX market yesterday because it occurred on a day the turnover was low compared with the previous trading session.

One factor that caused this problem was the shortage of forex to traders to meet the demands of their customers and what is surprising to observers is that the local currency is getting weaker despite an increase in the price of crude oil and Nigeria’s production level, according to a report released by the Organisation of the Petroleum Exporting Countries (OPEC).

During the trading day, the value of transactions stood at $141.94 million, 53.7 per cent or $164.83 million lower than the $306.77 million recorded on Wednesday.

At the interbank segment of the market, the local currency, after trading flat for a few days, depreciated by 4 kobo against the greenback yesterday to close at N410.91/$1 compared with N410.87/$1 it finished a day earlier.

Meamwhile, at the cryptocurrency market, October continued to prove a good month for investors as all the 10 key tokens tracked by Business Post closed bullish.

Ethereum (ETH) appreciated by 7.4 per cent to sell at N2,168,963.04, Ripple (XRP) moved northwards by 3.2 per cent to N649.99, Litecoin (LTC) gained 2.9 per cent to trade at N104,900.00, Dash (DASH) recorded a 2.8 per cent appreciation to N104,812.64, while Bitcoin (BTC) grew by 2.2 per cent to N33,091,963.04.

In addition, Dogecoin (DOGE) rose by 1.4 per cent to trade N144.78, Cardano (ADA) witnessed a 0.6 per cent rise to trade at N1,294.65, Tron (TRX) went up by 0.3 per cent to sell at N55.17, the United States Dollar Tether moved up by 0.3 per cent to N571.93 while Binance Coin (BNB) gained 0.1 per cent to trade at N191,707.06.