Naira Appreciates to N1,455.59/$1 at Official Market as CBN Barks

February 1, 2024
naira value

By Adedapo Adesanya

The Naira appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, January 31, after the Central Bank of Nigeria (CBN) moved to staunch banks from hoarding foreign exchange (FX) in a bid to stabilise the market, which had been under pressure lately.

The Naira was sold for N1,455.59 per Dollar at the spot market yesterday compared with the previous day’s exchange rate of N1,482.57/$1, indicating an appreciation of 1.8 per cent or N26.98.

However, the domestic currency weakened against the Pound Sterling in the official market in the midweek session by N597.46 to trade at N1,726.59/£1 versus Tuesday’s closing price of N1,129.13/£1 and against the Euro, it slid by N513.07 to wrap up at N1,475.34/€1 compared with the preceding session’s N962.27/€1.

Business Post reports that the supply of forex into the market improved yesterday, with the turnover at $134.07 million, 85.4 per cent or $61.74 million higher than the $72.33 million recorded on Tuesday.

A look at the peer-to-peer (P2P) arm of the forex window showed that the Nigerian currency depreciated against the greenback yesterday by N18 to settle at N1,454/$1, in contrast to the previous session’s N1,436/$1.

Also, in the parallel market, the woes of the Naira continued after it lost N20 against the Dollar on Wednesday to quote at N1,510/$1 compared with the previous day’s value of N1,490/$1.

In a circular titled Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks, the CBN on Wednesday raised concerns over the growing trend of banks holding large foreign currency positions.

The apex bank noted with worry the growth in foreign currency exposures of banks through their Net Open Position (NOP), which is the difference between a bank’s foreign currency assets (what it owns in foreign currencies) and its foreign currency liabilities (what it owes in foreign currencies), and mandated that it must not exceed 20 per cent short (owning more than owning) or 0 per cent long (owning no more than the bank’s shareholder funds not reduced by losses) of the bank’s shareholders’ funds.

A drive through the cryptocurrency market showed that Solana (SOL) declined by 6.7 per cent to $94.28, Bitcoin (BTC) fell by 2.0 per cent to $42,123.67, and Ethereum (ETH) went down by 2.9 per cent to sell at $2,269.05.

In addition, Cardano (ADA) recorded a 4.1 per cent decrease to quote at $0.49, Ripple (XRP) recorded a 3.5 per cent drop to trade at $0.4941, Binance Coin (BNB) shrank by 2.8 per cent to $297.90, Litecoin (LTC) slumped by 1.8 per cent to $66.65, and Dogecoin (DOGE) lost 1.4 per cent to settle at $0.0789, while the US Dollar Coin (USDC) and the US Dollar Tether (USDT) closed flat at $1.00 each.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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