The Naira appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N4.32 or 0.29 per cent on Monday, October 17 to to N1,465.29/$1 from the N1,475.35/$1 it was exxhanged in the preceding session, which was last Friday.
It also improved its value against the Pound Sterling in the official market yesterday by N14.81 to close at N1,964.96 /£1 compared with the previous rate of N1,979.77/£1, and gained N16.00 against the Euro to settle at N1,706.92/€1, in contrast to last Friday’s rate of N1,722.92/€1.
In the parallel market, the exchange rate of the Nigerian currency to its American counterpart remained unchanged at N1,490/$1 during the session and also traded flat at GTBank at N1,475/$1.
The positive performance of the Nigerian Naira was due to an ease in FX pressure following a $70 million injection by the Central Bank of Nigeria (CBN) and a rise in the country’s external reserves by $92.50 million to $42.68 billion.
The local forex market continues to be supported by improved market liquidity from local participants, oil revenues, and offshore portfolio inflows.
However, analysts expect pressure on the Naira as foreign investors sell local assets amid global risk aversion and limited supply of the greenback.
Escalating trade tensions between the US and China and weak Dollar supply as oil prices struggle may add to the pressure just as seasonal demand is expected to come in as the year cones to a close.
As for the cryptocurrency market, it was in red after a weekend bounce as investors feared further decline amid tensions between the US and China.
Market analysts, including digital asset investment firm, Acra, argued that the sharp selloff is part of a broader reset, and not a collapse. It signaled that calmer conditions are coming to the economy that will spur interests.
Binance Coin (BNB) was down by 5.5 per cent to $1,074.23, Ethereum (ETH) declined by 4.7 per cent to $3,888.80, Solana (SOL) shrank by 4.6 per cent to $184.76, and Cardano (ADA) lost 4.4 per cent to trade at $0.6447.
Further, Dogecoin (DOGE) depreciated by 3.9 per cent to $0.1944, Litecoin (LTC) slumped by 3.1 per cent to $97.72, Bitcoin (BTC) slid by 2.9 per cent to $108,000.80, and Ripple (XRP) decreased by 5.9 per cent to $2.43, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.