Nigerian Naira Declines on Fresh FX Liquidity Crisis

By Adedapo Adesanya

The Nigerian Naira further depreciated against the United States Dollar in the foreign exchange (forex) market on Friday amid renewed FX liquidity crisis.

The local currency was under pressure in the black market, Peer-to-Peer (P2P), and the Investors and Exporters (I&E) segments of the market.

In the parallel market, the Naira fell by N3 against the greenback to sell for N743/$1 compared with the previous day’s rate of N740/$1.

In the same vein, the domestic currency crashed by N10 against the Dollar in the P2P forex window to settle at N771/$1 as against the previous day’s rate of N761/$1.

Further, in the I&E segment, the Naira lost 50 Kobo or 0.11 per cent against the greenback to trade at N446.50/$1, in contrast to Thursday’s closing price of N446.00/$1.

The decline occurred amid a drop in the FX transactions at the spot market yesterday to $162.17 million from the preceding day’s turnover of $231.20 million, indicating a shortfall of $69.03 million or 29.9 per cent.

In the interbank segment, the Naira closed flat against the Pound Sterling and the Euro at N541.16/£1 and N467.43/€1 apiece.

Meanwhile, the cryptocurrency market recorded a negative outcome as the majority of the 10 tokens tracked by Business Post depreciated, with Litecoin (LTC) losing 2.1 per cent to trade at $76.52.

Dogecoin (DOGE) slipped by 1.6 per cent to trade at $0.0967, Ethereum (ETH) saw its value go down 1.3 per cent to sell at $1,265.83, Binance Coin (BNB) recorded a 1.1 per cent depreciation to settle at $287.40, and Ripple (XRP) went down by 1.1 per cent to close at $0.3882.

In addition, Cardano (ADA) posted a 0.9 per cent slide to sell at $0.3122, Solana (SOL) depreciated by 0.5 per cent to quote at $13.64, and Bitcoin (BTC) made a 1.4 per cent drop to sell at $17,161.76.

However, the US Dollar Tether (USDT) and Binance USD (BUSD) closed flat at $1.00 each.