Naira Crashes at I&E, P2P FX Windows as Dollar Scarcity Heightens

By Adedapo Adesanya

The Naira recorded one of its worst outings in weeks on Thursday as it depreciated against the American Dollar at both the Investors and Exporters (I&E) and the Peer-to-Peer (P2P) segments of the foreign exchange (forex) market.

Amid Nigeria’s biting forex crunch, the local currency fell by N2.25 or 0.54 per cent against the US Dollar at the official market to close at N422.50/$1 compared with the N420.50/$1 it was sold on Wednesday.

One of the factors that contributed to the downfall of the Nigerian Naira at the market window yesterday was the inability of FX traders to meet the demand of their customers.

Data from the FMDQ Securities Exchange showed that the forex turnover jumped during the session to $153.71 million from the previous day’s $82.60 million, indicating a rise in the day’s trades by 86.1 per cent or $71.11 million. In the absence of a sufficient supply of foreign currencies, traders had to ration what they had and this put pressure on the domestic currency.

It was not a different scenario at the P2P end of the FX market as the Naira lost N5 or 0.82 per cent to the Dollar on Thursday to trade at N615/$1 compared to the N610/$1 it recorded in the previous session.

However, things changed for the domestic currency in the interbank segment of the market as the Naira witnessed a marginal gain of 4 kobo against the British currency, the Pound Sterling, to close at N521.49/£1 in contrast to N521.53/£1 of the previous session and against the Euro, it closed flat at N446.39/€1.

As for the digital currency market, it was mainly bearish, with TerraClassicUSD (USTC) losing 5.3 per cent to sell for $0.0108. Litecoin (LTC) went down by 2.6 per cent to $59.85, Cardano (ADA) dropped 1.7 per cent to trade at $0.6293 and Dogecoin (DOGE) saw a 0.8 per cent slump to sell at $0.0792.

Further, Bitcoin (BTC) retreated by 0.5 per cent to quote at $30,086.8, Ethereum (ETH) depreciated by 0.3 per cent to sell at $1,791.43, while the US Dollar Tether (USDT) declined by 0.01 per cent to settle at $0.9992.

But Solana (SOL) recorded a 2.9 per cent growth to trade at $40.20, Binance Coin (BNB) appreciated by 1.1 per cent to sell at $290.79, while Ripple (XRP) gained 0.8 per cent to quote at $0.4038.