The Nigerian naira has seen a slight decline in its value against the US dollar. The Naira is falling (NAFEM) at N1,148.14/$1 on April 16, sliding against the US dollar in the foreign exchange market.
The USD strengthened as the NGN collapsed to a new low. The Nigerian currency was recently dubbed the best performing currency in the world, establishing its supremacy against rising currencies and economies.
Also Read: US Dollar Fails to Overtake Nigerian Naira Despite Overtaking Yuan and Yen
Why is Naira down?
The Naira depreciated against the USD during the latest market momentum. Naira is down by 1.07%, a depreciation of N12.10, compared to the previous day’s closing rate of N1,136.04/$1 (April 16) by legit.org.
One of the main reasons why the naira fell recently was due to interventions made by the Central Bank of Nigeria regarding the region’s foreign exchange reserves.
“Data shows that the CBN withdrew about $2.16 billion to stabilize the naira. As of April 15, 2024, data from the apex bank revealed that external reserves were now positioned at $32.29 billion. Legitimate. ng reported.
The depreciation of the naira caused further monetary chaos, leading the EFCC to crack down on speculators manipulating the naira in foreign markets.
“The commission is not only going after Binance, but also other cryptocurrency compliance and exchanges; this helped stabilize the market.
Additionally, another notable portal, Punch, exposes the reasons for the sudden decline of the Naira.
“Last week, the CBN gave 1,101 naira to the dollar, but the parallel market sold at 950 naira. This is what even made some BDCs not bid for dollar collection from the CBN because when you collect that dollar from the CBN, you automatically run at a loss because we are selling at N950. Unfortunately for the dollar, banks are now interbanking.” The shared point of sale
EFCC spokesperson, Dele Oyewale, said they were doing everything in their power to expand the value of the naira and reach new heights.
“The commission does everything prescribed by law to ensure the smooth functioning of Nigeria’s foreign exchange market.”
USD continues to dominate global currencies
The US dollar appears to be the ultimate winner against the main world currencies. In a recent report published by Morgan Stanley, the dollar will continue to shine while maintaining its status as the leading reserve currency.
Also read: US Dollar hammers Chinese Yuan, Indian Rupee and Japanese Yen
“We expect the dollar to retain its reserve status despite ongoing challenges. The challenges posed by an increasingly multipolar world,” Morgan Stanley said in a note.
However, Morgan Stanley explained how the organization expects the dollar to experience fluctuations in the current market environment.
“We expect only a moderate and gradual decline in the international use of the dollar. The reason is the rise of multipolarity and the maintenance of low diversification costs for reserve managers,” the note said.
reference: watcher.guru