Naira Gains 0.19% as Supply Boost Cools FX Market

May 25, 2024
deposit old Naira notes

By Adedapo Adesanya

The Naira gained 0.19 per cent or N2.85 per cent on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) to exchange at N1,482,81/$1 on Friday compared with the previous day’s value of N1,485.66/$1 as foreign exchange (FX) supply surged to ease worries that dominated the market.

Data showed that the forex turnover for the trading session increased by 231.9 per cent or $388.70 million to $556.25 million from the $167.55 million reported a day earlier.

The last time the spot market witnessed such FX liquidity was March 28, 2024, when transactions closed at $857.78 million.

But this forex liquidity could not save the local currency from crumbling against the Pound Sterling at the official market, as it lost N14.52 to trade at N1,885.28/£1 versus N1,870.76/£1 and declined against the Euro by N18.59 to finish at N1,609.95/€1 versus N1,591.36/€1.

The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, during the Monetary Policy Committee (MPC) briefing in Abuja on Tuesday, said the committee members observed the recent volatility in the FX market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system.

The team also noted the marginal increase in the external reserve balance between March and April 2024 and urged the bank to sustain its focus on accretion to reserves.

The MPC commended the central bank for the recent approval of licenses of 14 international Money Transfer operators (IMTOs). This is expected to improve competition and lower the cost of transactions, thus attracting more remittances through formal channels.

A look at the black market showed that the Nigerian Naira weakened against the Dollar yesterday by N5 to sell at N1,510/$1, in contrast to the preceding session’s N1,505/$1.

Cryptocurrencies rose on Friday with Dogecoin (DOGE) the biggest gainer as the meme coin recorded a 3.8 per cent rise to sell at $0.1642 after the dog, Kabosu, which inspired the token, died during the session.

Further, Ripple (XRP) grew by 2.8 per cent to trade at $0.535, Bitcoin (BTC) increased by 2.2 per cent to $68,634.61, Ethereum (ETH) jumped by 1.9 per cent to $3,751.88, Binance Coin (BNB) went up by 1.6 per cent to $600.95, Solana (SOL) leapt by 1.0 per cent to $168.66, Cardano (ADA) soared by 0.8 per cent to $0.4617, and Litecoin (LTC) appreciated by 0.7 per cent to sell at $85.19, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

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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