The Naira plunged against the US Dollar by N70 in the parallel market, settling at N1,120/$1, and also fell by 7.6% against the Dollar in the official market, closing at N1,154.08/$1. However, the Naira remained stable against the Pound Sterling and Euro in the spot market. In the cryptocurrency market, Bitcoin rose 1.3%, Solana gained 2.9%, while Ripple, Cardano, Litecoin, Binance Coin, Dogecoin, and Ethereum all declined in value.
Nigeria's Naira Plunges Sharply Against US Dollar, Hits N1,120/$1 in Parallel Market
The Nigerian naira suffered a significant devaluation on Thursday, dropping by N70 against the US dollar in the parallel market segment of the foreign exchange market. This brings the exchange rate to N1,120/$1, a stark contrast to the previous closing price of N1,050/$1 on Wednesday.
The naira's decline was equally evident in the official market, known as the Nigerian Autonomous Foreign Exchange Market (NAFEM). It depreciated by 7.6 percent or N7.78 against the greenback, closing at N1,154.08/$1 compared to N1,072.74/$1 the previous day.
Despite recent efforts by the Central Bank of Nigeria (CBN) to stabilize the currency, the naira has experienced renewed volatility in recent days. On the positive side, the currency managed to hold steady against the British Pound Sterling and the Euro in the spot market on Thursday, closing at N1,147.53/£1 and N1,220.17/€1, respectively.
However, forex turnover declined significantly, with a drop of $3.50 million or 1.85 percent to $185.62 million from the $189.12 million recorded a day earlier. This suggests reduced market activity and increased uncertainty among market participants.
In the cryptocurrency market, Bitcoin (BTC) exhibited a slight uptick of 1.3 percent ahead of its upcoming halving event, which is expected to remove a substantial number of coins from circulation. However, analysts from Wall Street giant JPMorgan (JPM) caution that the coin's price may weaken following the halving, which is scheduled to occur around April 19-20.
Other cryptocurrencies experienced mixed fortunes on Thursday. Solana (SOL) gained 2.9 percent during the session, while Ripple (XRP) lost 1.8 percent and Cardano (ADA) slipped by 1.6 percent. Litecoin (LTC) declined by 1.1 percent, Binance Coin (BNB) shed 0.8 percent, Dogecoin (DOGE) fell by 0.3 percent, and Ethereum (ETH) depreciated by 0.1 percent. Stablecoins such as the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
The continued depreciation of the naira against the US dollar has raised concerns among economic analysts and businesses. The currency's instability can impact import costs, foreign investment, and overall economic growth. The CBN has reiterated its commitment to maintaining exchange rate stability, but it remains to be seen whether the apex bank's interventions can effectively address the underlying factors driving the naira's weakness.
