By Adedapo Adesanya
The Naira depreciated against the United States Dollar in the opening session of the week across the foreign exchange (FX) market segments on Monday, January 22 amid worsening forex supply constraints.
The local currency depleted against the greenback yesterday by N23.09 or 2.5 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEM) window to sell at N925.54/$1 compared with the preceding day’s N902.45/$1.
However, the Nigerian currency traded flat against the British Pound Sterling and the Euro during the trading session at N1,129.27/£1 and N969.69/€1, respectively.
The value of FX trades in the spot market decreased by 49.7 per cent or $72.56 million to $73.33 million from the $145.89 million achieved last Friday, according to data from the FMDQ Securities Exchange.
In the parallel market, the domestic currency lost N5 against the US Dollar on Monday to quote at N1,360$1 versus the preceding session’s exchange rate of N1,355/$1.
Also, in the peer-to-peer (P2P) section of the forex market, the Naira plunged against the Dollar during the session by N20 to trade at N1,357/$1 versus the preceding session’s N1,337/$1.
All indications point that the weakening of the Naira will continue depreciation in 2024, analysts at Standard and Poor’s (S&P) Global Ratings said.
This will be triggered by Nigeria’s broadly flat reserves which limit the supply of the much-needed foreign exchange (FX), adding that higher import costs, backlogs of FX transactions, and lower FX receipts stemming from oil exports will constrain growth in the country’s reserves.
In the digital currency market, Bitcoin’s price fell below $40,000, continuing a decline that began after the recent launch of spot Bitcoin exchange-traded funds (ETFs) in the US.
The outflows from Grayscale’s GBTC Bitcoin Trust have been notably large as investors exit positions to take profits after having been locked into the fund.
Yesterday, BTC slumped by 2.7 per cent to $39,991.38 and Ethereum (ETH) weakened by 3.3 per cent to $2,344.04, with Solana (SOL) falling by 5.3 per cent to $85.15.
Litecoin (LTC) went down by 4.8 per cent to $68.22, Dogecoin (DOGE) crashed by 3.4 per cent to $0.0808, and Cardano (ADA) slid by 3.3 per cent to trade at $0.4829.
In addition, Binance Coin (BNB) dropped 2.1 per cent to sell at $310.49, Ripple (XRP) depreciated by 1.9 per cent to trade at $0.5287, and US Dollar Tether (USDT) lost 0.02 per cent to settle at $0.999, while Binance USD (BUSD) remained unchanged at $1.00.
