Naira Slides to N,579/$1 at Official FX Market

By Adedapo Adesanya

The Naira weakened to N1,579.89 per Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, August 16, after it lost 0.98 per cent or N15.49 at the close of transactions. In the previous day, it was transacted against the greenback at N1,564.48/$1.

The local currency has continued to come under pressure as a result of foreign exchange (FX) liquidity issues triggered by low forex earnings by the country.

Equally, the local currency depreciated against the Pound Sterling in the official market by N3.65 to sell at N2,033.36/£1 compared with the preceding session’s N2,029.71/£1.

In the same vein, the domestic currency tumbled against the Euro in the spot market yesterday by N4.79 to quote at N1,737.69/€1 versus Thursday’s rate of N1,742.48/€1.

The woes coincided with the 22.8 per cent or $34.02 million shortfall in the value of forex transactions recorded at NAFEM on Friday to $115.23 million from the $149.25 million printed a day earlier.

The volatile outcome of the market occurred as the Central Bank of Nigeria (CBN) altered its initial position not to aggressively defend the Naira in the currency market with the reintroduction of the retail Dutch auction system

Last week, the CBN conducted a Retail Dutch Auction for $815.36 million, targeted at the retail-end users, predominantly manufacturers, out of a total bid value of $1.19 billion. The cut-off rate was set at N1,459/$1.

In the parallel market, the Naira lost N5 against the US Dollar during the trading session to settle at N1,605/$1 compared with the previous day’s value of N1,600/$1.

A look at the digital currency market showed a mixed outcome amid a quiet trading session with Solana (SOL) losing 3.9 per cent to sell at $139.14, and Dogecoin (DOGE) down by 1.0 per cent to $0.1009.

Also, Ethereum (ETH) lost 0.9 per cent to trade at $2,559.06, Ripple (XRP) recorded a 0.6 per cent depreciation to settle at $0.565, and Litecoin (LTC) went down by 0.4 per cent to $66.21.

On the flip side, Bitcoin (BTC) appreciated by 1.0 per cent to trade at $59,189.33, Cardano (ADA) rose by 0.6 per cent to trade at $0.3297, and Binance Coin (BNB) increased by 0.1 per cent to close at $521.41, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.