Naira Falls at Official Market as Low FX Supply Hinders CBN’s Fresh Move

October 14, 2023
weakening Naira

By Adedapo Adesanya

The Naira could not sustain the expected positive momentum against the US Dollar in the Nigerian Foreign Exchange Market (NFEM), formerly known as the Investors and Exporters (I&E) window of the forex market on Friday, October 13 as it dropped 0.8 per cent or N 5.66 after the Central Bank of Nigeria (CBN) promised intervention as it lifted embargos on 43 items starved of FX since 2015.

On Thursday, the apex bank said it would boost liquidity in the official market by supplying FX from time to time until the market attains stability.

Market analysts said this development may not have the intended impact on the rates because the country grapples with low forex supply and a widening uncleared backlog put at $12 billion. With the entrants of fresh customers seeking from the limited pool, it would further put pressure on the rates. Many would have to opt for other markets to acquire the much-needed currency, a move that would further expand the disparity in rates.

This came into play yesterday as the value of the Nigerian Naira weakened against the greenback N764.86/$1 from the previous day’s N759.20/$1, as the supply of FX shrank by 86.9 per cent or $354.64 million to $53.02 million from $407.66 million on Thursday.

However, in the Peer-to-Peer (P2P) window, the Naira gained N6 against the American currency to sell at N1.035/$1, in contrast to the preceding day’s rate of N1,041/$1.

In the parallel market, the domestic currency appreciated against the US Dollar on Friday by N2 to sell at N1,043/$1, in contrast to the previous day’s value of N1,045/$1.

In the official market, the local currency improved its value against the Pound Sterling yesterday by N11.50 to close at N931.14/£1 versus Thursday’s N942.64/£1 and gained N7.98 against the Euro to close at N805.14/€1 versus N813.12/€1.

The cryptocurrency market was bullish during the session, with Solana (SOL) jumping by 4.1 per cent to $22.09 following a recent upgrade.

Dogecoin (DOGE) appreciated by 1.1 per cent to sell at $0.0585, Binance Coin (BNB) went up by 0.9 per cent to $206.44, Ripple (XRP) rose by 0.7 per cent to $0.4845, Bitcoin (BTC) increased by 0.4 per cent to $26,897.61, Ethereum (ETH) added 0.7 per cent to close at $1,550.71, Litecoin (LTC) grew by 0.4 per cent to $61.57, and Cardano (ADA) gained 2.1 per cent to close at $0.2463, while Binance USD (BUSD) and the US Dollar Tether (USDT) closed flat at $1.00 apiece.

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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