The Nigerian naira has noted a slight downturn in value against the USD. The Naira is down (NAFEM) to N1,148.14/$1 on April 16, sliding against the US dollar in the foreign exchange market.
The USD gained strength as the NGN slumped to a new low. The Nigerian currency was recently dubbed the best-performing currency in the world, establishing supremacy against rising currencies and economies.
Also Read: US Dollar Fails to Surpass Nigerian Naira Despite Outpacing Yuan & Yen
Why is Naira down?
The Naira depreciated against the USD in the latest market dynamics. Naira is down 1.07%, or N12.10 depreciation, compared to the previous day’s closing rate of N1,136.04/$1(April 16) per legit.org.
One of the primary reasons why the naira plummeted recently was due to the interventions made by the Central Bank of Nigeria concerning the region’s FX reserves.
“Data shows that the CBN has removed about $2.16 billion to stabilize the naira. As of April 15, 2024, data from the apex bank revealed that the external reserves were now positioned at $32.29 billion.” Legit. ng reported.
The depreciating value of the naira has spurred a new currency mayhem, leading the EFCC to crack down on speculators manipulating the naira in foreign markets.
“The commission is not only going after Binance but other cryptocurrency compliance and exchanges; this has been helping in stabilizing the market.”
Additionally, another notable portal, Punch, states reasons for the Naira’s sudden decline.
“Last week, the CBN gave the dollar N1,101, but the parallel market sold at N950. That was what even made some BDCs not bid for a collection of dollars at CBN, because when you collect that dollar from CBN, you automatically run at a loss because we sell at N950. Unfortunately for the dollar, banks are now doing their interbank.” The outlet shared
The spokesperson of the EFCC, Dele Oyewale, shared that they are doing everything they can to extend the value of the naira to hit new highs.
“The commission is doing everything within the ambit of the law to ensure that there’s sanity in Nigeria’s foreign exchange market.”
USD Continues to Dominate World Currencies
The US dollar is emerging as the ultimate winner against major world currencies. In a recent report published by Morgan Stanley, the USD will continue shining brightly while maintaining its top reserve currency status.
Also Read: US Dollar Hammers Chinese Yuan, Indian Rupee & Japanese Yen
“We expect the USD to endure its reserve status despite ongoing challenges. Challenges posed by an increasingly multipolar world,” Morgan Stanley said in a note.
However, Morgan Stanley further shared how the organization expects the USD to encounter fluctuations in the current market narrative.
“We expect only a moderate and gradual decline in USD’s international use. The reason being the rise in multipolarity and continued low diversification costs for reserve managers,” the note said.