Naira Appreciates to N1,396 Per Dollar at Official FX Market

By Adedapo Adesanya

The Naira appreciated further on the Dollar in the the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, January 29 by N3.49 or 0.25 per cent to N1,396.99/$1 from the previous session’s N1,400.48/$1.

This was supported by foreign portfolio inflows from a recent bond auction and relatively subdued Dollar demand.

Year old reforms in the FX market as well as structural reforms in the oil sector have eased fears and buoyed investments, boosting foreign capital inflows and stronger diaspora remittances.

Also, the weakening of the Dollar has lent support as the American currency hit a four-year low triggered by tariff uncertainty, policy volatility including threats to US Federal Reserve independence, and rising fiscal deficits.

It also improved its value against the Euro in the official FX market yesterday by N3.75 to quote at N1,671.78/€1 versus midweek’s rate of N1,675.53/€1, but lost N2.05 against the Pound Sterling to trade at N1,932.04/£1 versus Wednesday’s closing rate of N1,929.99/£1.

In the parallel market, it gained N10 against the US Dollar to settle at N1,470/$1 compared with the previous session’s exchange rate of N1,480/$1 but remained unchanged at N1,426/$1 at the GTBank forex desk.

Market traders expect the Naira to remain fairly stable and could strengthen further with a bond auction in the coming week.

Meanwhile, the cryptocurrency market was weaker as traders reacted to reports that US President Donald Trump would nominate former Federal Reserve Board member, Mr Kevin Warsh, to replace current Federal Reserve Chair, Mr Jerome Powell. It is believed that Mr Warsh is bearish on crypto.

President Trump said late Thursday he would name his nominee on Friday morning, a day after lambasting Mr Powell and the US central bank for not choosing to reduce rates. The US Federal Reserve left interest rates unchanged at its meeting on Wednesday.

Cardano (ADA) fell by 8.1 per cent to $0.3225, Ethereum (ETH) declined by 7.9 per cent to $2,718.16, Solana (SOL) slipped by 7.6 per cent to $113.90, Ripple (XRP) crashed by 7.3 per cent to $1.74, Litecoin (LTC) went down by 6.8 per cent to $63.55, Bitcoin (BTC) depreciated by 6.7 per cent to $82,292.42, Binance Coin (BNB) decreased by 6.6 per cent to $839.47, and Dogecoin (DOGE) retreated by 7.1 per cent to $0.1131, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.