Naira Nears N1,000/$1 at Official, Parallel Markets

April 18, 2024
weakening Naira

By Adedapo Adesanya

The Naira bounced back from the previous day’s loss on Wednesday, appreciating by 6.6 per cent or N75.40 against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Business Post reports that the Nigerian currency is selling at almost N1,000 to a Dollar in the official market, as it closed yesterday’s trading session at N1,072.74/$1 versus the previous day’s N1,148.14/$.

The local currency also improved its value against the Pound Sterling in the spot market at midweek by N298.92 to sell at N1,147.53/£1 compared with Tuesday’s closing value of N1,446.45/£1, and against the Euro, it gained N14.62 to quote at N1,220.17/€1 versus N1,234.79/€1.

It was observed that the domestic currency performed well at NAFEM during the session despite a 69.4 per cent or $170.52 million shortfall in the value of FX transactions to $189.12 million from the $268.75  million transacted a day earlier.

Similarly, in the parallel market, the Naira maintained its positive performance against the Dollar on Wednesday as it appreciated by N50 to trade at N1,050/$1 compared with the preceding day’s rate of N1,100/$1.

The sustained gains in recent times have been attributed to the policy thrust of the Central Bank of Nigeria (CBN), including the clearing of overdue FX backlogs, injection of funds into banks and approved sellers, as well unorthodox moves in conjunction with other bodies to clamp down on speculators and hoarders.

Recent interviews granted by Nigerian government officials have shown that the CBN is not stopping providing support to the market.

The Governor of the CBN, Mr Yemi Cardoso, speaking at the ongoing International Monetary Fund-World Bank Spring Meetings in the US said the depleting external reserve is due to debt repayments, other obligations, and depletion due to the ordinary course of business as seen in other countries.

He also stated that there were no intentions to defend the currency with the external reserves, as it was counterintuitive.

Also, the Minister of Finance, Mr Edun said the government is working to increase oil production to at least 2 million barrels per day. Oil accounts for more than 60 per cent of Nigeria’s FX earnings.

Meanwhile, the cryptocurrency market witnessed a bearish outcome yesterday ahead of the Bitcoin (BTC) halving which happens every four years.

Halving is when the rewards for Bitcoin miners are cut in half to reduce the pace at which new Bitcoins enter the market. Since there will ever only be 21 million bitcoins, the halving serves to create more scarcity. Its value went down by 4.3 per cent at midweek to $61,147.43 losing 4.3 per cent.

Further, Dogecoin (DOGE) fell by 5.9 per cent to $0.1468, Solana (SOL) declined by 4.7 per cent to $132.44, Ethereum (ETH) shrank by 3.6 per cent to $2,978.78, Cardano (ADA) dipped by 2.2 per cent to $0.447, and Ripple (XRP) lost 1.0 per cent to sell at $0.4928.

Conversely, Litecoin (LTC) rose by 1.3 per cent to $79.98, and Binance Coin (BNB) jumped by 0.5 per cent to $545.29, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00, respectively.

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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