Naira Value Appreciates to N1,418.78/$1 at NAFEM Amid Shrink in FX Supply

By Adedapo Adesanya

The supply of foreign exchange (FX) to the Nigerian Autonomous Foreign Exchange Market (NAFEM) shrank on Wednesday, February 7, though this did not stop the Naira from appreciating against the US Dollar at the close of transactions.

Data from the FMDQ Securities Exchange revealed that the value of forex trades executed yesterday stood at $203.93 million compared with the $465.29 million achieved in the preceding trading day, indicating a decline of 56.2 per cent or $261.36 million.

As earlier stated, this did not affect the performance of the Nigerian currency against the greenback as it gained 1.1 per cent or N15.11 to settle at N1,418.78/$1, in contrast to Tuesday’s closing price of N1,433.89/$1.

However, it took a toll on the value of the domestic currency against the British Pound Sterling in the official market as it lost N12.33 to quote at N1,781.89/£1 compared with the previous day’s rate of N1,769.56/£1 and against the Euro, it slumped by N8.11 to trade at N1,521.94/€1 versus the N1,513.83/€1 it was transacted a day earlier.

In the Peer-to-Peer (P2P) window, the local currency improved its value against the Dollar in the midweek session by N16 to sell at N1,463/$1 compared with the last closing value of N1,479/$1.

But in the parallel market, the Nigerian currency weakened against the American currency on Wednesday by N25 to close at N1,485/$1, in contrast to Tuesday’s exchange rate of N1,460/$1.

The FX market is already reacting to the moves by the Central Bank of Nigeria (CBN) to stabilise the system through a series of measures.

A look at the digital currency market showed that the bulls were coming back with Solana (SOL), the low-latency blockchain that’s seen an explosion in activity in recent months, returning after experiencing an approximately five-hour outage on Tuesday.

Its value jumped 6.2 per cent to $102.07, as Bitcoin (BTC) which rose 3.9 per cent to $44,607.65, and Binance Coin (BNB) gained 3.4 per cent to sell at $311.85, with Ethereum (ETH) expanding by 2.7 per cent to $2,432.28.

In addition, Cardano (ADA) appreciated by 2.6 per cent to $0.5101, Ripple (XRP) increased by 1.7 per cent to $0.802, Dogecoin (DOGE) improved by 1.7 per cent to $0.5133, and Litecoin (LTC) soared by 1.2 per cent to $68.83, while the US Dollar Tether (USDT) and US Dollar Coin (USDC) traded flat at $1.00 each.