High Demand for Forex Weakens Naira to N1,669/$1 at NAFEM

By Adedapo Adesanya

It was not a good day for the Nigerian Naira in the official market on Wednesday as its value weakened against the US Dollar at the close of transactions.

Data showed that the domestic currency lost 8.3 per cent or N127.21 against the greenback at midweek in the Nigerian Autonomous Foreign Exchange Market (NAFEM) to settle at NN1,669.15/$1 versus the preceding day’s N1,541.94/$1.

The FX market has been volatile as recent efforts to bring some stability to the market through a series of auctions held by the Central Bank of Nigeria (CBN) for official dealers and Bureau de Change (BDCs) have not been able to tackle high seasonal demand.

With the fourth quarter commencing, high demand has returned to the market and the most recent intervention went to only Bureau De Change (BDC) operators.

The value of FX trades in the spot market yesterday went down by 2.9 per cent or $5.41 million to $176.45 million from the $181.86 million recorded in the last trading session, which was Monday as the market closed on Tuesday for the 64th Independence Day anniversary of Nigeria.

But the local currency was flat against the Pound Sterling and the Euro at NAFEM yesterday at N2,143.65/£1 and N1,789.71/€1, respectively.

A look at the parallel market indicated that the Nigerian currency appreciated against the Dollar on Wednesday by N5 to sell at N1,695/$1 compared with the previous trading day’s N1,700/$1.

As for the cryptocurrency market, it tumbled over the last 24 hours as headlines of escalating tension in the Middle East prompted investors to flee risk assets.

Ripple (XRP) dropped 10.7 per cent to sell at $0.5335. Despite broader risky factors, XRP’s tumble came amid the US Securities and Exchange Commission (SEC) appealing a judge’s ruling against Ripple made months ago.

Ethereum (ETH) slid by 3.4 per cent to trade at $2,536.86, Solana (SOL) slump by 3.0 per cent to $141.62, Cardano (ADA) shrank by 2.9 per cent to $0.3461, and Dogecoin (DOGE) lost 2.7 per cent to sell at $0.1052.

Further, Litecoin (LTC) declined by 0.6 per cent to $63.60, Binance Coin (BNB) went down by 0.6 per cent to $548.89, and Bitcoin (BTC) depreciated by 0.4 per cent to $61,224.71, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.