The value of the Naira appreciated against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, May 29 amid fresh optimism despite sustained pressure on the country’s external reserves and a widening demand-supply gap in the FX market.
During his speech to commemorate his second year in office on Thursday, President Bola Tinubu said reforms, including the liberalisation of the forex market, has brought about development in the country.
“While foreign exchange revaluation pushed our debt-to-GDP ratio to around 53 per cent, our debt service-to-revenue ratio dropped from nearly 100 per cent in 2022 to under 40 per cent by 2024. We paid off our IMF obligations and grew our net external reserves by almost 500% from $4 billion in 2023 to over $23 billion by the end of 2024.
“Thanks to our reforms, state revenue increased by over N6 trillion in 2024, ensuring that subnational governments can reduce their debt burden, meet salaries and pension obligations on a timely basis, and invest more in critical infrastructure and human capital development,” he said.
However, analysts point out that the country still faces a series of headwinds, particularly high inflation and high borrowing costs.
At the official market yesterday, the domestic currency gained 0.32 per cent or N5.11 on the greenback to trade at N1,586.49/$1 versus Wednesday’s rate of N1,591.60/$1.
Also, the local currency appreciated against the Pound Sterling in the spot market during the session by N4.61 to close at N2,140.67/£1 compared with the preceding session’s N2,145.28/£1 and gained N1.87 on the Euro to finish at N1,799.65/€1 versus midweek’s value of N1,801.52/€1.
At the parallel market, the exchange rate of the Nigerian Naira to the US Dollar remained unchanged at N1,625/$1 on Thursday.
As for the digital currency market, with Bitcoin (BTC) down by 2.6 per cent to sell for $104,978.41 and Dogecoin (DOGE) losing 8.8 per cent to sell at $0.2046.
The crypto market usually turns much more volatile as loss-making traders attempt to minimize their loss while profitable traders push market prices to unlock higher profits.
During the trading day, Cardano (ADA) slipped by 6.6 per cent to $0.7013, Litecoin (LTC) fell by 6.4 per cent to $90.78, Solana (SOL) slumped by 5.4 per cent to $163.45, Ripple (XRP) declined by 3.9 per cent to $2.19, Ethereum (ETH) sank by 3.7 per cent to $2,627.16, and Binance Coin (BNB) tumbled by 2.3 per cent to $669.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.