The exchange rate of the Nigerian Naira to a United States Dollar declined further at the parallel market, the Nigerian black market for foreign exchange (forex), on Tuesday.
The local currency traded at N740 to a United States Dollar, a decline of N3 from the N737 it exchanged on Friday.
At the Central Bank of Nigeria (CBN) regulated forex section, the Naira traded at N432.87 to a U.S. Dollar, slightly below N432.54 it was sold on September 28, 2022.
Similarly, the Pounds Sterling gained some ground against the Naira, appreciating by 2.47%, or N11.34 from N458.5357 to N469.8804.
Against the Euro common currency, the story is not different as the embattled Naira dropped 1.63% or N6.7656 to N420.7496 from N413.984.
Persistent forex scarcity amid growing economic uncertainty ahead of the 2023 general elections continues to drag on the local currency. Also, a series of economic policies instituted to arrest the situation had either compounded the woes of the local currency or generally ineffective.
In an effort to rein in inflation and simultaneously lure foreign investors into the Nigerian economy, the CBN-led monetary policy committee raised interest rates by 150 basis points to 15.5%, a position widely contested by most economic experts and stakeholders.
However, the CBN had insisted that to sustain capital inflow at a period when global economies are aggressively raising interest rates, Nigeria also must improve borrowing costs to ensure global investors look the country’s way, especially given that foreign revenue from crude oil had dropped significantly with rising oil theft.
Still, experts think it would hurt new business creation, new job creation, new investment and generally, the state of the economy as evident with the stock market in recent weeks.
Crude Oil
Brent crude, oil against which Nigerian oil is priced, dipped by 29 cents or 0.29% to $91.51 a barrel in the early hours of Wednesday. While the U.S. West Intermediate oil shed 40 cents or 0.46% to $86.12 a barrel.
Slowing demand, rising global interest rates, high inflation, strong U.S. Dollar amid Russia Ukraine unrest are some of the factors hurting the oil outlook.
China, the world’s largest importer of the commodity, is struggling with growth following reports of COVID-19 lockdown and strict restrictions in key commercial cities. Few of the economic data released in recent weeks pointed to declining growth in the world’s second-largest economy.
Cryptocurrency
The cryptocurrency space remains bearish despite a few gains here and there. Bitcoin, the world’s most dominant cryptocurrency, appreciated by 0.53% in the last 24 hours to $20,078.66 a coin.
Eth, a token of the Ethereum protocol, remains largely subdued. Trading at $1,342.93 a coin, representing a decline of 0.60%.
Ripple (XRP), BNB, Stellar and Solana gained 3.70%, 0.49%, 0.48% and 0.68% to $0.478528, $292.53, $0.117434 and $33.72, respectively.
