Naira Crashes 0.61% on High FX Demand, Weak Supply

By Adedapo Adesanya

The Naira depreciated against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 0.61 per cent or N10.18 to quote at N1,676.90/$1 on Monday, November 4, compared with the N1,666.72/$1 it was traded last Friday.

The poor performance of the Nigerian currency against its American counterpart yesterday was caused by the inability of FX traders to meet the high demand from their customers.

Data showed that the value of forex transactions stood at $79.47 million on Monday, 15.7 per cent or $14.75 million lower than the $94.22 million recorded in the preceding trading day.

With the festive season approaching, there will be higher demand for the FX but with the Central Bank of Nigeria (CBN) choosing to limit interventions, this has placed additional pressure on the local currency.

It was not surprising when the domestic currency also weakened against the British Pound Sterling yesterday in the official market by N3.38 to wrap the session at N2,160.63/£1 compared with the previous trading day’s N2,157.25/£1 and against the Euro, it depreciated by N1.61 to trade at N1,816.40/€1 versus N1,814.79/€1.

A look at the black market indicated that the Nigerian Naira appreciated against the greenback yesterday by N10 to sell for N1,720/$1, in contrast to the preceding session’s value of N1,730/$1.

The cryptocurrency market continued to weigh the US presidential elections with outcomes largely negative although the price of Dogecoin (DOGE) continued to rise as billionaire backer Elon Musk continued advocating for former President Donald Trump.

Among the benchmarked cryptocurrencies, Dogecoin rose and led by 7.7 per cent to $0.1627, and Ripple (XRP) appreciated by 0.4 per cent to $0.5076.

On the flip side, Ethereum (ETH) lost 1.8 per cent to quote at $2,423.88, Solana (SOL) slumped by 1.7 per cent to trade at $159.82 and Bitcoin (BTC) recorded a 1.0 per cent loss to sell at $68,347.34.

Further, Litecoin (LTC) shed 0.6 per cent to finish at $66.62, Cardano (ADA) fell by 0.6 per cent to $0.3301, and Binance Coin (BNB) went down by 0.5 per cent to $557.03, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.