Naira Weakens at Official Market as CBN Begins Clearing FX Backlogs

By Adedapo Adesanya

The Nigerian Naira weakened against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, November 2 but witnessed gains at the unregulated market segments of the foreign exchange (forex) market as the Central Bank of Nigeria (CBN) started clearing outstanding matured FX forwards in banks.

The Naira, at the official market, depreciated by 0.9 per cent or N7.26 to quote at N793.28/$1 during the session, in contrast to the previous day’s rate of N786.02/$1, according to data obtained from FMDQ Securities Exchange.

It was observed that the supply of FX into the spot market increased, though it could not satisfactorily meet the demands of customers.

Transactions worth $136.11 million were executed in the market window yesterday compared with the $105.98 million achieved a day earlier, indicating an increase of $30.13 million or 28.4 per cent.

However, in the Peer-to-Peer (P2P) window of the market, the local currency improved its value against the greenback by N89 to close at N1,024/$1 compared with the preceding day’s N1,113/$1.

It was observed that earlier in the trading session, the nation’s legal tender exchanged with its US counterpart at N974/$1 in the P2P, particularly after it emerged that the apex bank was clearing FX debts.

In the black market, the domestic currency gained N20 against the Dollar on Thursday to sell at N1,140/$1 compared with the midweek session’s N1,160/$1.

Also, the Nigerian currency appreciated against the Pound Sterling in the official market yesterday by N6.00 to close at N983.42/£1 versus N989.42/£1 and improved by N1.79 against the Euro to end at N858.45/€1 versus N860.24/€1.

In a related development, the digital currency market was largely bearish on Thursday, with Bitcoin (BTC) down by 2 per cent to $34,550 and Ethereum (ETH) down by 2.2 per cent to $1,800.02.

Further, Solana (SOL) recorded a 6.6 per cent slump to trade at $39.02, Dogecoin (DOGE) depreciated by 1.9 per cent to sell at $0.0676, Ripple (XRP) dropped 1.1 per cent to settle at $0.5984, and Litecoin (LTC) slumped by 0.9 per cent to $69.39.

However, Cardano (ADA) flew by 3.7 per cent to $0.318, and Binance Coin (BNB) leapt by 0.7 per cent to $230.77, while Binance USD (BUSD) and the US Dollar Tether (USDT) traded flat at $1.00 apiece.