Naira Strengthens to N1,501/$1 at NAFEM, N1,520/$1 at Black Market

By Adedapo Adesanya

The Naira showed no sign of waning, as its value improved against the US Dollar in the two key segments of the foreign exchange (FX) market; the black market and the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, September 9, buoyed by liquidity and optimism.

The local currency strengthened against the greenback in the official market at midweek by N4.92 or 0.33 per cent to N1,501.29/$1 from the N1,506.21/$1 it was exchanged on Tuesday.

Equally, the domestic currency appreciated against the Pound Sterling at the spot market yesterday by N3.85 to sell for N2,034.79/£1 compared with the previous day’s N2,038.64/£1, and gained N6-36 against the Euro to quote at N1,759.37/€1 versus the previous day’s N1,765.73/€1.

Similarly, the Nigerian currency firmed up against the United States Dollar in the parallel market during the session by N5 to settle at N1,520/$1, in contrast to the N1,525/$1 it was traded a day earlier.

The Naira has attained stability this month, backed by robust FX liquidity and an efficient FX market. Specifically, analysts expect sustained inflows from foreign portfolio investors (FPIs) due to stronger market confidence.

Also, liquidity has helped reduced speculation with banks and other sources offering competitive rates that it helping to reduce hoarding and allowing traders to sell cheaper to avoid wider loss margins.

Policy direction that have seen cooling of headline inflation rate, commodities prices dip, improvement of non-oil export receipts and diminished incentives for speculative positioning in the Naira are likely to sustain the momentum.

Meanwhile, the cryptocurrency market was bullish on Wednesday as traders anticipated US Consumer Price Index (CPI) figures due later on Thursday. A cooler trajectory would strengthen the case for a near-term Federal Reserve cut and could soften the Dollar, typically supportive for the broader crypto market.

Dogecoin (DOGE) rose by 4.1 per cent to $0.2504, Litecoin (LTC) appreciated by 3.4 per cent to $116.94, Ethereum (ETH) expanded by 2.8 per cent to $4,435.25, Bitcoin (BTC) grew by 2.3 per cent to $114,413.29, Solana (SOL) went up by 1.8 per cent to $223.43, Ripple (XRP) surged by 1.5 per cent to $3.00, Binance Coin (BNB) soared by 1.4 per cent to $897.08, and Cardano (ADA) jumped by 1.2 per cent to $0.8882, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.