Naira Strengthens to N895/$1 on Renewed Optimism in FX Market

By Adedapo Adesanya

The Nigerian Naira recorded its first gain of the new year on Thursday after it appreciated by 13.5 per cent or N139.89 on the American Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on fresh optimism in the financial markets.

The country’s legal tender was strengthened on the greenback during the session to N895.23/$1 from the preceding session’s exchange rate of N1,035.12/$1.

However, it maintained stability against the British Pound Sterling and the Euro yesterday in the official market at N1,155.11/£1 and N1,002.49/€1, respectively despite a shortfall in the supply of foreign exchange (FX) to the market segment.

According to data from the FMDQ Securities Exchange, the value of forex trades on Thursday was $68.49 million compared with the $85.68 million recorded in the previous trading session, indicating a $17.19 million or 20.1 per cent decline.

However, in the black market, the domestic currency weakened against the US Dollar on Thursday by another N10 to close at N1,240/$1, in contrast to the midweek’s closing price of N1,230/$1.

In the same vein, the local currency depreciated against its American counterpart in the Peer-to-Peer (P2P) window of the forex market yesterday by N13 to settle at N1,226/$1 versus Wednesday’s value of N1,213/$1.

In a related development, the cryptocurrency market was largely negative amid anticipation of the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) by the US Securities and Exchange Commission. The expectation is that the approval of the spot ETF will attract huge investments.

Among benchmarked coins, only BTC and Dogecoin (DOGE) gained, rising by 0.9 per cent and 0.4 per cent, respectively to close at $43,679.11 and $0.0829.

Cardano (ADA) lost 1.7 per cent to trade at $0.5543, Ripple (XRP) slumped by 1.3 per cent to $0.5745, Binance Coin (BNB) dropped 1.1 per cent to sell for $318.00, Solana (SOL) declined by 0.2 per cent to $100.86, Litecoin (LTC) also went down by 0.2 per cent to $65.58, and Ethereum (ETH) slid by 0.01 per cent to $2,245.73, while the US Dollar Tether (USDt) and US Dollar Coin (USDC) traded flat at $1.00 each.