Naira Crashes at Forex Market as Cash Scarcity Worsens

By Adedapo Adesanya

The Naira suffered losses against the United States Dollar in the parallel market and the Peer-to-Peer (P2P) windows of the foreign exchange (forex) market on Wednesday as the scarcity of the local currency worsened, sparking violent protests across the country.

In the black market, the exchange rate of the Naira to the Dollar in the midweek session was N757/$1 compared with the previous day’s N754/$1, indicating a decline of N3.

Also, in the P2P segment, the Nigerian Naira depreciated against the greenback yesterday by N3 to settle at N768/$1, in contrast to the preceding session’s rate of N765/$1.

But at the Investors and Exporters (I&E) arm of the FX market, the domestic currency appreciated by 17 Kobo or 0.04 per cent to trade at N461.50/$1 compared with the preceding day’s N461.67/$1.

This happened as there was an $89.54 million turnover, $20.69 million or 30.1 per cent higher than the $68.85 million recorded a day earlier.

In the interbank segment, the Naira appreciated against the Pound Sterling by 15 Kobo on Wednesday to close at N555.98/£1 versus its previous rate of N556.13/£1, ut against the Euro, it lost N1.84 to finish at N494.02/€1 compared with Tuesday’s exchange rate of N492.18/€1.

Meanwhile, in the cryptocurrency market, Bitcoin (BTC) traded above $24,000 as markets continue to react to the latest US inflation report. The consumer price index rose 0.5 per cent in January, following a gain of 0.1 per cent the month prior. Overall, the annual rate of inflation came in at 6.4 per cent.

At the close of business yesterday, BTC jumped by 11.1 per cent to sell at $24,643.17, and Ethereum (ETH) rose by 8.9 per cent to $1,690.66, while Solana (SOL) appreciated by 9.7 per cent to $23.73.

Further, Binance Coin (BNB) added 9.0 per cent to sell for $323.26, Dogecoin (DOGE) grew by 7.5 per cent to $0.0895, Litecoin (LTC) went up by 7.4 per cent to $102.60, Cardano (ADA) rose by 7.2 per cent to trade at $0.4128, and Ripple (XRP) recorded a 5.6 per cent gain to settle at $0.4007, while the US Dollar Tether (USDT) and Binance USD (BUSD) traded flat at $1.00 each.