By Adedapo Adesanya
The Naira appreciated by 1.8 per cent or N25.09 on the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, as the Central Bank of Nigeria (CBN) announced a fresh rate hike and expressed its commitment to continue propping the FX market.
The local currency exchanged for the US Dollar at N1,382.95/$1 in the official market during the trading session compared with the N1,408.04/$1 it was traded Monday, its continuous gain for the last five days at a stretch.
On Tuesday, the CBN hiked the benchmark interest rate by 200 basis points from 22.75 per cent to 24.75 per cent. It also adjusted the asymmetric corridor around the Monetary Policy Rate (MPR) to +100/-300 from +100/-700, but retained the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks, with the liquidity ratio held intact at 30 per cent. It raised the CRR of merchant banks to 14 per cent from 10 per cent.
The Governor of the CBN, Mr Yemi Cardoso, also said the bank has continued to yield positive results from its FX-related policies and expressed optimism about appropriate price discovery in the market.
He added that the need for the apex bank to intervene will be minimal to non-existent.
“The exchange rate is moderating and we expect it to continue to moderate to a suitable rate,” he added.
At the spot market yesterday, the domestic currency sadly weakened against the Pound Sterling by N18.20 to trade at N1,790.98/£1 versus N1,772.78/£1, and against the Euro, it depreciated by N13.56 to close at N1,534.95/€1 compared with the preceding day’s N1,521.39/€1.
The value of forex trades recorded during the trading session increased by 10.7 per cent or $23.78 million to $245.58 million from $221.80 million, according to data from the FMDQ Securities Exchange.
In the parallel market, the Nigerian Naira appreciated against the greenback by N60 to trade at N1,350/$1 compared with the preceding session’s exchange rate of N1,410/$1, according to data obtained by Business Post.
In a related development, the cryptocurrency market recorded a largely weak outcome on Tuesday, with Solana (SOL) down by 2.8 per cent to $189.92 and Ripple (XRP) down by 2.4 per cent to $0.6294.
In addition, Binance Coin (BNB) went down by 2.3 per cent to $580.01, Cardano (ADA) depreciated by 1.5 per cent to $0.6607, and Ethereum (ETH) slipped 0.8 per cent to $3,606.73.
But Litecoin (LTC) surged by 5.6 per cent to $96.54, Dogecoin (DOGE) appreciated by 4.6 per cent to $0.1882, and Bitcoin (BTC) grew by 0.01 per cent to $70,396.88, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.