FX Supply Crunch Drives Naira to N430/$1 at Spot Market

July 6,2022

Amid a biting foreign exchange (forex) supply crunch, the Naira on Tuesday, July 5 depreciated to its lowest level yet at the Investors and Exporters (I&E) segment of the currency exchange market.

The local currency fell by N4.25 or 1.0 per cent against the US Dollar to close at N430.00/$1 in contrast to the N425.75/$1 that it sold in the previous session.

This happened amid dollar shortages which are crippling the economy due to recessionary fears in top global economies, leading to central banks hiking their interest rates.

However, the value of the Naira to the Dollar appreciated by N2 or 0.32 per cent at the Peer-to-Peer segment of the forex market yesterday as the exchange rate was N618/$1 compared to N620/$1 it closed in the week’s opening session

But in the parallel market, the domestic currency depreciated by N2 against the greenback on Tuesday to sell at N611/$1 compared with the previous day’s value of N609/$1, according to information gathered by us from FX traders on the streets of Lagos.

Meanwhile, in the interbank segment of the market, the Naira recorded gains against the British Pound Sterling and the Euro yesterday.

Against the British currency, the Nigerian currency strengthened by N6.82 to wrap up at N498.83/£1 versus N505.65/£1 in the previous session and against the Euro, it gained N6.83 to settle at N427.93/€1 versus N434.76/€1.

Meanwhile, on the cryptocurrency market, the bears took charge as all the 10 digital coins depreciated, with Litecoin (LTC) dropping 4.2 per cent to trade at $49.94, followed by TerraClassicUSD (USTC), which dropped 3.0 per cent to sell for $0.0567.

Dogecoin (DOGE) went down by 2.9 per cent to $0.0674, Cardano (ADA) dropped 2.4 per cent to trade at $0.4571, Ethereum (ETH) depleted by 2.1 per cent to $1,131.46, Bitcoin (BTC) slid 1.4 per cent to settle at $20,022.66, Ripple (XRP) recorded a 1.1 per cent slide to trade at $0.3234, Binance Coin (BNB) recorded a 0.7 per cent fall to sell at $233.09, Solana (SOL) depreciated by 0.3 per cent to $35.90 and the US Dollar Tether (USDT) moved downward by 0.02 per cent to $0.999