Naira Sinks to N1,537/$1 as FX Supply Constraints Frustrate CBN Interventions

By Adedapo Adesanya

The Naira’s downfall resumed against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, February 16, despite recent efforts by the Central Bank of Nigeria (FX) to tackle underlying issues.

According to data obtained from FMDQ Securities Exchange, the local currency dropped N39.71 or 2.7 per cent to sell for N1,537.96/$1 versus the previous day’s rate of N1,498.25/$1.

The official market was affected by foreign exchange (FX) supply constraints during the session, with the turnover going down to $84.10 million, far below the recent average forex sales in the spot market.

However, the domestic currency appreciated against the Pound Sterling in the official market yesterday by N28.29 to close at N1,877.47/£1 versus the preceding day’s N1,905.76/£1, and against the Euro, it gained N17.53 to sell for N1,608/€1, in contrast to Thursday’s value of N1,625.53/€1.

Things did not still go well with the Naira in the Peer-to-Peer (P2P) forex window, as it weakened against the greenback by N31 to trade at N1,628/$1 versus the previous day’s N1,597/$1.

Equally, the Nigerian currency suffered a N35 loss against the US Dollar in the parallel market during the session to quote at N1,640/$1 compared with the preceding day’s exchange rate of N1,605/$1.

The CBN this week continued issuing directives to help the market. Some of these have also extended to oil companies as the bank aggressively seeks to boost Dollar liquidity in the domestic market and help stabilise the plunging Naira.

Meanwhile, in the cryptocurrency market, investors took profit, leading major coins to see losses following an earlier rise triggered by a surge in the price of Bitcoin (BTC) to a two-year high.

Solana (SOL) declined by 3.8 per cent to $109.49, Cardano (ADA) fell by 2.9 per cent to $0.5915, Ripple (XRP) also decreased by 2.9 per cent to $0.5592, Ethereum (ETH) went down by 1.9 per cent to sell at $2,791.52, and Dogecoin (DOGE) shrank by 1.8 per cent to trade at $0.0851.

Further, Bitcoin (BTC) slumped by 0.7 per cent to sell at $51,975.06, Binance Coin (BNB) recorded a 0.2 per cent depreciation to trade at $360.60, and  Litecoin (LTC) slid by 0.1 per cent to $70.42, while the US Dollar Coin (USDC) and the US Dollar Tether (USDT) retained parity at $1.00 each.