The Nigerian Naira appreciated against its global counterparts on Wednesday at the Central Bank of Nigeria (CBN) regulated foreign exchange section.
The Naira appreciated against the United States Dollar, rising marginally by N0.6 from N415.65 it was sold on Tuesday to N415.59 on Wednesday, Investors King reports.
Against the Pounds Sterling, the local currency appreciated by N1.071 from N509.9194 it traded on Tuesday to N508.8484.
While against the Euro common currency, the Naira exchange rate improved N1.7257 to N437.076, up from N438.8017.
Naira Black Market Rate
However, the story is different in the unregulated foreign exchange market popularly known as the black market. The local currency was sold at N610 to a United States Dollar in Lagos and Abuja. While in Ibadan the Naira was exchanged at N605 to US$1.
Chronic foreign exchange scarcity in Nigeria amid an increase in demand continues to drag on the Dollar to Naira exchange rate despite the CBN directing forex users to Deposit Money Banks (DMBs). In the last one week, bank customers are complaining of the inability to withdraw dollars from their domiciliary bank accounts as many DMBs are presently out of dollars.
The lack of stability at the Central Bank of Nigeria’s regulated forex section forced many Nigerians to approach the black market for their forex needs.
Crude Oil
Global oil prices inched slightly higher on Thursday as investors assess the impact of the recession and rising interest rates on the demand for the commodity and tight supplies.
Brent crude oil, against which Nigerian oil is priced, 38 cents, or 0.3%, to $112.12 a barrel, having dropped as low as $104.04 in the previous session. U.S. West Texas Intermediate (WTI) crude appreciated by 32 cents or 0.3% to $106.51 a barrel.
Energy investors are worried about recession and how it could impact the entire sector, especially with nations raising interest rates to curb escalating inflation.
“Recession fears have their grip on markets, but the mood swing is rather one of ebbing optimism than swelling pessimism,” said Julius Baer analyst Norbert Rucker.
Cryptocurrency
The cryptocurrency space remained in the red like every other risk asset. Capital inflow into the space plunged with rising interest rates and concerns over recession in developed economies.
Bitcoin, the world’s most capitalised cryptocurrency, hovers around $20,460.51 and $19,000 price levels while Ethereum has pared losses to $1,103.39 a coin.
Meanwhile, a popularly cryptocurrency broker, Voyager Digital has cut its daily withdrawal limit from $25,000 to $10,000 after detailing its exposure to a struggling hedge fund, Three Arrows Capital.
Three Arrows Capital (3AC) had disclosed on Friday that it suffered heavy losses in the recent market downturn and said it had hired legal and financial advisers to figure a way out.
Kyle Davies, 3AC co-founder, however, said “We are committed to working things out and finding an equitable solution for all our constituents”.
