Naira Weakens to N1,533/$1 at Official Market

By Adedapo Adesanya

The Naira started the fresh week at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on a negative note on Monday as its value depreciated against the United States Dollar.

According to data, the domestic currency weakened against the greenback during the session by N1.04 or 0.07 per cent to close at N1,533.77/$1, in contrast to last Friday’s value of N1,532.73/$1.

However, the local currency appreciated against the Pound Sterling in the official market on Monday by N1.50 to trade at N2,076.89/£1 compared with the preceding session’s N2,078.39/£1 and lost N1.11 against the Euro to close at the rate of N1,791.36/€1 versus N1,790.25/€1.

In the parallel market, the Nigerian Naira maintained stability against the Dollar during the trading session at N1,550/$1.

Notably, the Central Bank of Nigeria (CBN) did not make any direct interventions last week but analysts expect stability for the Naira to continue within the N1,530 – N1,540 per Dollar range, underpinned by robust FX liquidity and an efficient FX market.

A report by Coronation Merchant Bank revealed that total FX inflows rose to $787.50 million last week, up from $732.80 million in the previous week.

Non-bank corporates were the highest contributors, accounting for $227.4 million (28.88 per cent), followed by exporters with $179.6 million (22.81 per cent). The CBN received $171.2 million (21.74 per cent), while foreign portfolio investors (FPIs) brought in $167.4 million (21.26 per cent). Individual sources added $37.3 million (4.73 per cent), and other international sources made up 0.57 percent of total inflows.

Gross external reserves increased by $431.86 million (1.1 per cent) to $40.72 billion as of Wednesday, supported by consistent daily inflows throughout the week.

Support also came as headline inflation also eased for the fourth straight month in July as the National Bureau of Statistics (NBS) reported that inflation eased by 34 basis points to 21.88 per cent year-on-year in July from 22.22 per cent year on year. This continues to make cases for a possible interest rate cut.

Meanwhile, the digital currency market turned bearish as traders hopped on a wave of profit-taking with over $3.5 billion of profit realised over the weekend.

Dogecoin (DOGE) fell by 2.8 per cent to $0.2174, Solana (SOL) lost 1.4 per cent to quote at $179.85, Ethereum (ETH) depreciated by 1.3 per cent to $4,232.60, Bitcoin (BTC) dropped 0.5 per cent to $115,015.11, and Litecoin (LTC) slumped by 0.2 per cent to $116.64.

But, Binance Coin (BNB) rose by 1.4 per cent to $843.33, Ripple (XRP) gained 1.2 per cent to finish at $3.01, and Cardano (ADA) increased by 1.1 per cent to $0.9252, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.