Panic as Naira Further Crumbles to N475/$1 After N5 Loss

strong dollar demand Naira

By Adedapo Adesanya

The scarcity of forex at the parallel market is beginning to take its toll on the value of the Nigerian currency at the foreign exchange market.

Business Post keenly observed that the low yield environment in the fixed income market as a result of the cutting of rates to almost zero per cent is making some investors to seek a safe haven in the Dollar.

This has fuelled the huge request for the American currency by investors, who want to hedge their investments against devlaution and the rising inflation in the country.

According to the National Bureau of Statistics (NBS) on Monday, inflation for October 2020 jumped by 14.23 per cent from 13.71 per cent a month earlier.

At the black market yesterday, after the stats office released the inflation data, there was a panic, which further affected the outcome of the Naira.

During the trading day, the value of the local currency depreciated sharply by N5 or 1.06 per cent against the greenback to sell at N475/$1 in contrast to N470/$1 it was exchanged at the previous session.

As if that was not enough, the Nigerian currency also performed woefully against the Pound Sterling at the parallel market, losing N7 to quote at N607/£1 compared to N600/£1 of the last session and on the Euro, it declined by N8 to close at N553/€1 versis N545/€1 it finished last Friday.

However, at the Bureaux De Change (BDC) segment of the market, the value of the Naira to the Dollar remained at the regulated price of N386/$1 just as the exchange rate of the Naira to Dollar rate remained unchanged at the interbank window yesterday at N379/$1.

Similarly, the value of the local currency against the Dollar remained flat on Monday at N386/$1 at the Investors and Exporters (I&E) segment.

This was helped by the 2.3 per cent or $2.57 million decline in the value of transactions recorded in the space during the trading session. On Monday, trades worth $111.38 million were recorded as against the $113.95 million quoted last Friday.

A look at the cryptocurrency market yesterday showed that all the seven digital tokens monitored by Business Post on Quidax appreciated.

The Litecoin (LTC) pulled a 20.4 per cent gain to sell at N35,650.50, Ripple (RPX) rose by 8.2 per cent to sell for N138.99, while Dash (DASH) gained 5.3 per cent to trade at N38,791.01.

In addition, the Bitcoin (BTC) appreciated by 5.1 per cent to trade at N7,964,618.99, Ethereum improved by 2.6 per cent to trade at 220,800.00, Tron (TRX) gained 2.4 per cent to sell for N12.28, while the US Dollar Tether (USDT) moved up by 0.6 per cent to sell for N477.88.

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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