Naira Sustains Stability at FX Market Amid Cash Shortage

By Adedapo Adesanya

The shortage of the new and old Naira notes in Nigeria seems to be solidifying the value of the local currency in the foreign exchange (FX) market segments.

This is because the exchange rate of the domestic currency with the United States Dollar has been relatively stable in the past days at the various forex market windows.

In the Investors and Exporters (I&E) arm of the market, the Naira traded flat against the greenback yesterday at N461.50/$1 despite coming under heavy forex demand pressure.

Data from FMDQ Securities Exchange showed that forex trades worth $105.37 million were completed in the midweek session at the I&E, $20.33 million or 23.9 per cent higher than the $85.04 million recorded on Tuesday.

Also, in the parallel market, currency hawkers were largely idle as Nigerians were more concerned with the scarcity of cash in the financial system, queuing in banks and ATM galleries for hours just to withdraw their money. At the close of business yesterday, the exchange rate of the Naira to the Dollar remained unchanged at N750/$1.

At the Peer-to-Peer (P2P) segment, the Nigerian currency gained N1 against its American counterpart to settle at N760/$1, in contrast to Tuesday’s value of N759/$1.

Also in the interbank window, the Naira appreciated against the British Pound Sterling by N2.51 to trade at N568.42/£1 versus the preceding session’s N570.93/£1 and gained 16 Kobo against the Euro to close the day at N502.35/€1 compared with N502.51/€1 of the previous day.

At the cryptocurrency market, the hike in the interest rate by 25 basis points or 0.25 per cent by the Federal Reserve helped the market, as Bitcoin (BTC) rose by 2.7 per cent to trade at $23,740.49 while Ethereum (ETH) increased by 3.4 per cent to sell at $1,639.52.

Litecoin (LTC) surged by 7.9 per cent to $101.11, Solana (SOL) appreciated by 4.3 per cent to $24.95, Cardano (ADA) grew by 2.3 per cent to $0.3981, Ripple (XRP) improved by 1.9 per cent to $0.4146, Binance Coin (BNB) recorded a 1.7 per cent rise to sell at $317.64, while Binance USD (BUSD) and the US Dollar Tether (USDT) closed flat at $1.00 each.