Naira gains 0.07% at NAFEM as CBN dollar sales support liquidity

The Naira appreciated by N1.01 or 0.07 per cent against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Tuesday, November 3, to N1,346.93/$1 from N1,347.94/$1 the previous day.

Spot market movement

At NAFEX, the domestic currency improved against the Pound Sterling by N1.62 to N1,807.72/£1 from Monday’s N1,809.34/£1. It also gained N1.41 against the Euro to N1,510.85/€1 from N1,512.26/€1. The Naira traded flat against the greenback at the parallel market and the GTBank forex desk at N1,378/$1 and N1,354/$1, respectively.

Liquidity and demand pressure

Recent market cycles saw elevated demand pressure as Foreign Portfolio Investors (FPIs) exited local equity and adjusted fixed-income bets, causing short-term Dollar liquidity shortfalls. The market also saw a surge in service-related requests and higher inventory imports ahead of the festive season, typically intensifying Dollar demand.

Data from the Central Bank of Nigeria (CBN) showed that interbank FX turnover surged by 62.8 per cent to $118.957 million from $21.765 million. The number of FX deals increased to 117 deals from 23 deals. Last week, the CBN sold $950 million to banks and other authorised dealers in the foreign exchange market to address the liquidity gap and strengthen the local currency.

Crypto coins rise

In the cryptocurrency market, most benchmarked coins were up as analysts said clearer US midterm election results eased political uncertainty. Traders bought hundreds of millions of Dollars in bitcoin call options, which wager on rising prices, as election-day options block trading more than doubled from the previous day.

Ethereum (ETH) rose by 2.3 per cent to $2,295.24, Cardano (ADA) grew by 2.1 per cent to $0.1902, Bitcoin (BTC) appreciated by 1.9 per cent to $77,924.60, Ripple (XRP) gained 1.8 per cent to close at $1.27, Solana (SOL) improved by 1.4 per cent to $92.87, Binance Coin (BNB) jumped by 1.3 per cent to $699.66, Dogecoin (DOGE) soared by 1.3 per cent to $0.0747, and TRON (TRX) increased by 0.4 per cent to $0.3215, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.

For Nigerian businesses and consumers, the session shows two forces at work. CBN dollar sales and higher interbank turnover are easing short-term liquidity, while festive import demand and FPI exits remain pressure points.