Naira Value Falls Across Forex Market Segments

January 25, 2024
devalue naira
Image Credit: Jean Chung/Bloomberg

By Adedapo Adesanya

Continued disruption in the supply of foreign exchange (FX) into the currency market further weakened the value of the Naira against the US Dollar across the segments on Wednesday, January 24, despite reassurances by the Central Bank of Nigeria (CBN) to bring ease to the market.

In the Nigerian Autonomous Foreign Exchange Market (NAFEM) window yesterday, the local currency depreciated against the greenback by 0.4 per cent or N3.63 to sell at N882.24/$1 compared with the previous day’s N878.61/$1, according to data from the FMDQ Securities Exchange.

Also, the Naira witnessed a downward movement against the Pound Sterling during the session by N21.98 to sell at N1,141/£1 versus Tuesday’s closing price of N1,163.87/£1 and against the Euro, it depreciated by N18.46 to finish at N977.59/€1, in contrast to the preceding day’s N996.05/€1.

It was observed that the supply of forex to the spot market was depressed, with the turnover at $56.60 million in the midweek session, 3.2 per cent or $1.86 million lower than the $58.46 million achieved a day earlier.

In the Peer-to-Peer (P2P) segment, the value of the Nigerian currency depreciated by N8 to close at N1,378/$1 compared with the previous day’s value of N1,369/$1.

In the same vein, the domestic currency plunged against the Dollar on Wednesday by N15 to quote at N1,380/$1, in contrast to the N1,365/$1 it was exchanged on Tuesday.

The forex crisis in Nigeria has heightened recently after plans by the CBN to unify the rates have seen no progress since the underlying cause, supply remains yet to be settled.

At a summit on  Wednesday, the CBN Governor, Mr Olayemi Cardoso, said the Naira is undervalued, adding that priority must be given to transparency in the Nigerian foreign exchange rate system to attain stability and fair determination of rates.

“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” he added.

A look at the cryptocurrency market showed that Solana (SOL) continued to rise as it notched a 4.1 per cent as more products continued to be built on its network due to its accessibility and affordability.

Litecoin (LTC) climbed higher by 0.8 per cent to $65.59, Cardano (ADA) also recorded a 0.8 per cent increase to sell at $0.4701, Bitcoin (BTC) rose by 0.5 per cent to $39,923.02, Ripple (XRP) gained 0.12 per cent to trade at $0.5143, and the US Dollar Tether (USDT) grew by 0.02 per cent to $0.9997.

However, Binance Coin (BNB) slipped by 3.6 per cent to trade at $288.06, Ethereum (ETH) went down by 0.6 per cent to $2,208.74, and Dogecoin (DOGE) dipped by 0.12 per cent to $0.0781, while the US Dollar Coin (USDC) retained parity at $1.00.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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