Following aggressive actions against foreign currency whales that adversely affected the value of the local currency, pressure on the Nigerian naira decreased. The Naira advanced against the US dollar by 4.96% to settle at ₦1,582.94, according to data from the FMDQ website.
Comparably, the Naira strengthened vs the US dollar on the parallel market, closing at N1,628 per dollar. Up until the Nigerian government confronted companies like Binance, OctaFX, and other peer-to-peer cryptocurrency exchange platforms, exchange rates at both marketplaces had gotten worse.
For peer-to-peer trading, the majority of Nigerians have wagered N1800+ NGN-USDT against the local currency. These platforms faced pressure in the local markets after receiving substantial sums of US cash from a nation that was finding it difficult to fulfill qualifying demand.
There was also a run at the parallel market, which forced the Central Bank of Nigeria (CBN) to review Bureau de Change Operations (CBN) guidelines. The CBN is now demanding recapitalisation of BDCs, restructuring and disclosures. Analysts said this will likely reduce the number of BDCs by half in the coming months.
securities operatives knocked on some illegal currency traders’ doors in Abuja last week as the naira suffered the largest freefall in years.
The Naira problem is multifaceted, according to LSintelligence Associates research analysts who believe that market cleaning efforts that the authority embarked upon were supposed to be the first move before the official devaluation of the naira.
According to analysts, unofficial market distortion was responsible for the majority of pressures facing the local currency, noting that Nigeria’s import dependency is cancerous to the future of the naira.
In the global commodities market, West Texas Intermediate (WTI) crude futures advanced by 0.08% to $76.56 per barrel on Monday. However, the Brent Crude decreased by 0.23% to close at $81.43 per barrel.
At the end of trading session yesterday, Nigeria’s gross external reserves settled at $33.44 billion ahead of expected Fx inflows into the country from various sources.
