Forex Demand Pressure Suffocates Naira at Official Market, Others

By Adedapo Adesanya

The Naira performed badly against the United States Dollar in the black market, the Peer-to-Peer (P2P), and the Investors and Exporters (I&E) windows of the foreign exchange (FX) market on Friday, August 23.

The Nigerian currency was suffocated by the persistent forex demand pressure during the session, as the Central Bank of Nigeria (CBN) makes efforts to ease the tension.

In the parallel market, the domestic currency depreciated against the Dollar yesterday by N5 to sell at N905/$1 compared with the previous day’s value of N900/$1.

Also, in the I&E segment of the market, the local currency lost N6.73 or 0.78 per cent to trade at N778.42/$1 versus Thursday’s value of N771.69/$1, amid a decline in the value of FX transition due to liquidity issues.

Forex trades recorded on the last trading session of the week stood at $73.80 million, $47.80 million or 39.3 per cent lower than the $121.60 million reported on Thursday.

Equally, in the P2P arm, the Naira lost N4 against the American currency to sell at N915/$1, in contrast to the previous trading day’s N911/$1.

In the official market, the Naira traded flat against the Pound Sterling and the Euro on Friday at N976.76/£1 and N504.64/€1, respectively.

In the cryptocurrency market, the comments by the Federal Reserve Chair, Mr Jerome Powell, that inflation remains too high and that the US central bank remains open to raising rates further if needed impacted the landscape.

The remarks by Mr Powell strengthened the narrative that interest rates are likely to remain higher for longer, sending a ripple across markets.

As a result, Bitcoin (BTC) slumped by 0.3 per cent to $26,048.51, and Ethereum (ETH) dropped 0.1 per cent to $1,651.40, while Solana (SOL) lost 2.1 per cent to trade at $20.26, as Cardano (ADA) fell by 0.9 per cent to $0.2597, with the US Dollar Tether (USDT) dropping 0.06 per cent to $0.9994.

However, Litecoin (LTC) went up by 1.6 per cent to $65.22, Dogecoin (DOGE) gained 1.2 per cent to sell at $0.0631, Ripple (XRP) rose by 0.9 per cent to $0.5201, while Binance Coin (BNB) expanded by 0.8 per cent to $217.08, while Binance USD (BUSD) traded flat at $1.00.