Naira Drops 0.3% at NAFEM Amid Weak FX Supply

By Adedapo Adesanya

The Naira remained in the dungeon on Thursday after it further depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, September 19.

Business Post reports that the value of the domestic currency went down by against the greenback during the session by N4.37 or 0.3 per cent to close at N1,544.02/$1 compared with Wednesday’s closing rate of N1,539.65/$1.

However, the Naira strengthened its value against the Pound Sterling in the official market by N71.98 on Thursday to sell at N2,108.64/£1 versus the preceding session’s N2,180.62/£1.

It followed the same route against the Euro at the spot market yesterday as it appreciated N4.79 to quote at N1,772.61/€1 versus midweek’s rate of N1,838.17/€1.

The mixed performance happened as the value of FX transactions at NAFEM significantly decreased by 37.2 per cent or $51.97 million to $87.51 million from $139.48 million.

The decline in supply comes as the Central Bank of Nigeria (CBN) appeared to have limited the sale of forex to Bureau de Change (BDCs) to $5,000 as outlined in the Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2024/2025.

This is aimed at regulating cash sales in the FX market to ensure stability and compliance.

As for the parallel market, the local currency depreciated against the Dollar yesterday by N5 to close at N1,665/$1, in contrast to the previous day’s value of N1,665/$1.

The cryptocurrency market, on its part, was bullish on Thursday, with Solana (SOL) gaining 7.4 per cent to sell at $148.06 amid the excitement about the Federal Reserve cutting the benchmark rate for the first time in four years.

On Wednesday, the Federal Open Market Committee (FOMC) announced that it was lowering the target range for the federal funds rate by 50 basis points.

Ethereum (ETH) rose by 5.3 per cent to trade at $2,539.49, Cardano (ADA) increased by 3.0 per cent to $0.3573, Bitcoin (BTC) appreciated by 2.9 per cent to $63,734.66, Binance Coin (BNB) gained 2.6 per cent to close at $573.05, Dogecoin (DOGE) jumped by 2.3 per cent to $0.1064, Litecoin (LTC) went up by 1.7 per cent to $66.11, and Ripple (XRP) increased by 0.5 per cent to $0.5869, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.