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Cryptocurrency News Articles
Nigerian Naira Plunges Against US Dollar in Official Market
Apr 23, 2024 at 05:55 pm
The Nigerian Naira has recently experienced a decline in value against the US Dollar in the NAFEM market. On April 22, the Naira weakened by 5.5% to N1,234.49/$1, despite an increase in FX supply. This decline follows an appreciation period where the Naira was considered one of the best-performing currencies.
Nigerian Naira Faces Renewed Depreciation Against US Dollar in Official Market
Lagos, April 25, 2023 - The Nigerian Naira has resumed its downward trajectory against the US Dollar in the official foreign exchange market, raising fresh concerns among economic analysts and market watchers.
On Monday, April 22, the local currency lost a significant 5.5% or N64.50 against the greenback in the Nigerian Autonomous Foreign Exchange Market (NAFEM). The exchange rate settled at N1,234.49/$1 compared to the previous session's N1,169.99/$1, marking a sharp reversal from recent gains.
This latest depreciation comes as the supply of foreign exchange (FX) to the spot market remains constrained. While the value of forex transactions increased yesterday by 27.1% or $23.49 million to $110.17 million, compared to the $86.68 million recorded the previous Friday, it remains below the levels required to support the stability of the Naira.
The recent depreciation of the Naira is particularly concerning given the currency's strong performance in recent months. The Naira had appreciated to a level where it was briefly touted as the best-performing currency globally, buoyed by the Central Bank of Nigeria's (CBN) FX reforms and strategic economic policies. Last week, the exchange rate had strengthened impressively to around N1,072.74, with market traders projecting that it might even breach the N1,000/$1 mark.
However, larger macroeconomic trends, including a stronger US Dollar amid rising inflation, have halted the Naira's upward momentum. Nevertheless, the Naira did improve its value against the Pound Sterling and the Euro on Monday. Against the Pound Sterling, it gained N14.88 to close the session at N1,431.31/£1, while against the Euro, it appreciated by N10.02 to sell at N1,228.09/€1.
In the black market, the Nigerian currency also depreciated against the US Dollar, falling by N100 to trade at N1,250/$1, compared to the previous day's value of N1,150/$1.
Meanwhile, the digital currency market experienced a bearish trend yesterday, with most of the major tokens tracked by Business Post declining. Dogecoin (DOGE) led the losses with a 2.8% decline to $0.1583, while Ethereum (ETH) lost 1.6% to quote at $3,178.29. Other tokens that recorded losses included Litecoin (LTC), Solana (SOL), Binance Coin (BNB), and Cardano (ADA).
However, Ripple (XRP) and Bitcoin (BTC) managed to buck the trend and posted gains. XRP jumped by 2.1% to $0.5502, while BTC rose by 0.1% to $66,448.95. The US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
The Naira's renewed depreciation is likely to raise concerns among businesses and investors who may perceive it as a sign of economic uncertainty. The CBN is expected to closely monitor the situation and take appropriate measures to stabilize the currency and maintain macroeconomic stability.
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