Naira gains ground against U.S. Dollar in NAFEM amidst anticipation of increased liquidity
By Sodiq Adelakun
On Friday, October 27, the Nigerian Naira gained ground against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) amid growing expectations that a much-needed boost in liquidity is on the horizon.
According to reports, the Nigerian government has decided to convert around $7billionn of Nigeria’s dividends from the Nigerian Liquified Natural Gas (NLNG) into a loan in order to strengthen the country’s troubled FX market.
A top official in the Nigerian government stated that the NLNG dividends, which are valued at approximately $7billion and come from a consortium led by Standard Chartered Bank, will be securitised.
On Monday, President Bola Tinubu and the Finance Minister announced that plans to stabilise the Naira were in place as well as fulfilling necessary FX obligations and clearing the backlogs.
In the official market, the domestic currency gained 5.7 per cent or N47.53 against the greenback to close at N789.94/$1 compared with the previous day’s rate of N837.47/$1.
This happened as the supply of FX into the spot market significantly improved during the session by 129.5 percent or $146.62 million to $259.84million from $113.22 million.
Also, in the Peer-to-Peer (P2P) window, the Nigerian currency appreciated against the United States Dollar by N8 yesterday to settle at N1,114/$1 versus Thursday’s N1,122/$1.
In the parallel market, the Naira gained N105 against the US currency on Friday to quote at N1,150/$1, in contrast to the preceding day’s exchange rate of N1,255/$1.
Similarly, the local currency improved its value against the Pound Sterling in the official market by N4.86 on Friday to trade at N969.59/£1 compared with the previous dday’s value of N974.45/£1 and on the Euro, it chalked up N5.35 to close at N843.72/€1 versus N849.07/€1.
Meanwhile, the digital currency market closed mixed, with Bitcoin (BTC) sliding by 0.1 per cent to $34,103.66 and Ethereum (ETH) losing 0.3 per cent to sell at $1,788.87.
Further, Dogecoin (DOGE) shed 3.0 per cent to trade at $0.0688, Ripple (XRP) fell by 0.9 per cent to $0.5454, Solana (SOL) slid by 0.9 per cent to $22.07, and Litecoin (LTC) dropped 0.2 per cent to trade at $67.99.
However, Cardano (ADA) rose by 3.5 per cent to $0.2954 and Binance Coin (BNB) increased by 0.4 per cent to $226.86, while the US Dollar Tether (USDT) and Binance USD (BUSD) remained unchanged at $1.00 each.
