By Adedapo Adesanya
The Naira strengthened against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, May 15 after the Central Bank of Nigeria (CBN) made efforts to salvage the situation.
The value of the Nigerian currency appreciated against the greenback in the official market yesterday by 4.0 per cent or N61.31 to close at N1,459.09/$1 compared with the previous day’s rate of N1,520.40/$1.
The regulator went back to the drawing board after the nation’s currency was taking a deep plunge after the gains recorded in the previous weeks, especially in late March and April.
The Nigerian government barked hard at speculators making a return to the market, and its decision to go tough paid off at midweek, backed by an improved supply of foreign exchange (FX) into the system.
Data obtained from the FMDQ Securities Exchange showed that the forex turnover for the trading session at the spot market jumped by 124.6 per cent or $160.38 million to $289.14 million from $128.76 million.
In supporting the CBN’s efforts, the Securities and Exchange Commission (SEC) and the Economic and Financial Crimes Commission (EFCC) have moved to go after players on the digital trading platforms making moves to weaken the currency.
It has already started seeing expected results in this orthodox move with the likes of Binance and more recently, Kucoin delisting from the Naira from their platforms. More exchanges are expected to take this route.
On the economic front, Nigeria’s inflation rate climbed for a 16th consecutive month to 33.69 per cent in April 2024, driven by increases in food prices, electricity tariffs and higher transport costs.
In the spot market at midweek, the domestic currency lost N122.87 against the Pound Sterling to sell for N1,890.47/£1 versus N1,767.62/£1 and shed N105.39 against the Euro, closing at N1,625.55/€1 versus N1,520.16/€1.
In the black market, the Nigerian currency depreciated against its American counterpart on Wednesday by N10 to finish at N1,530/$1 compared with Tuesday’s value of N1,520/$1.
Meanwhile, the cryptocurrency market improved during the session following the release of the April US inflation data, which showed that the Consumer Price Index (CPI), which measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, increased by 3.4 per cent.
The year-over-year inflation figure represents a slight decrease from March’s inflation rate of 3.7 per cent, as reported by the US Bureau of Labor Statistics (BLS).
Solana (SOL) rose by 12.2 per cent to trade at $161.55, Cardano (ADA) appreciated by 7.3 per cent to $0.4594, Bitcoin (BTC) rose by 6.1 per cent to $65,718.72, Dogecoin (DOGE) grew by 6.0 per cent to sell at $0.1555, Litecoin (LTC) gained 4.5 per cent to trade at $82.39, Ethereum (ETH) rose by 3.5 per cent to $3,005.92, Ripple (XRP) added 3.4 per cent to trade at $0.5177 followed by Binance Coin (BNB) which rose by 2.3 per cent to trade at $582.81, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.