Naira depreciates against US Dollar in NAFEM despite CBN's plan to flood market with FX

By Adedapo Adesanya The Naira depreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, July 19 despite plans by the Central Bank of Nigeria (CBN) to flood the market with sufficient foreign exchange (FX) in the coming weeks to boost liquidity in the market.

The Naira depreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, July 19 despite plans by the Central Bank of Nigeria (CBN) to flood the market with sufficient foreign exchange (FX) in the coming weeks to boost liquidity in the market.

Yesterday, the domestic currency closed lower against the greenback by 1.92 per cent or N30.10 to close at N1,596.92/$1 compared with the previous session’s closing rate of N1,566.82/$1.

The value of FX trades at the spot market, according to data from the FMDQ Securities Exchange, went down slightly by 8.2 per cent or $22.47 million to $250.67 million from the $273.14 million reported on Thursday.

The central bank indicated plans to stabilise the market for the next couple of weeks, indicating a possible easing in the rates.

“Over the next few weeks, the CBN will continue to support various segments of the official markets with liquidity,” a statement on Friday said.

“In line with the above, the CBN on Thursday, July 18 and Friday, July 19, 2024, sold a total of $106.5 million to authorized dealer banks between N1,498.00/$1 and N1.530.00/$1.

In addition, it bought $9.5 million from four authorized dealer banks at rates between N1,510.00/$1 and N1,550.00/$1 on Friday, July 19, 2024, according to a statement signed by Mrs Omolara Omotunde Duke, the Director of CBN’s Financial Markets Department.

In the black market segment, the Naira gained N55 against the US Dollar yesterday to trade at N1,580/$1 compared with the previous day’s value of N1,635/$1.

Meanwhile, the cryptocurrency market witnessed a boom on Friday, with Ripple (XRP) up by 8.8 per cent to $0.5965, as the US Securities and Exchange Commission (SEC) rescheduled the July 18 closed meeting to July 25.

While the meeting is closed to the public, investors expect the Ripple case, which has helped the market go up this week, to be a talking point.

Further, Dogecoin (DOGE) increased by 7.5 per cent to $0.1273, Solana (SOL) appreciated by 5.4 per cent to $169.34, Bitcoin (BTC) expanded by 4.9 per cent to $66,653.24, Cardano (ADA) grew by 4.7 per cent to $0.4401, Binance Coin (BNB) rose by 4.1 per cent to $590.59, Litecoin (LTC) jumped by 4.0 per cent to $73.35, and Ethereum (ETH) improved by 3.3 per cent to $3,493.60, while the US Dollar Tether (USDT) and US Dollar Coin (USDC) traded at $1.00 each.

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