For another trading session, the Naira further depreciated against the Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, May 12, by N2.46 or 0.18 per cent to N1,375.62/$1 from the previous day’s N1,373.16/$1.
It was not a different situation for the local currency in the same market window against the Pound Sterling yesterday, as it lost N3.35 to trade at N1,874.42/£1 versus Monday’s value of N1,871.07/£1, and declined against the Euro by N2.90 to settle at N1,621.31/€1 versus N1,618.41/€1.
However, in the parallel market, the Naira remained unchanged against the US Dollar during the session at N1,385/$1, and maintained stability at the GTBank forex counter at N1,375/$1.
The poor performance of the Naira was driven by dampened foreign portfolio investment inflows into Nigeria’s FX market, resulting in weaker supply conditions during the month.
Nevertheless, the currency’s performance remains relatively stable compared with previous periods of FX shortages that often resulted in sharp currency depreciation.
Also, escalating geopolitical tensions in the Middle East have disrupted global supply chains and altered international trade flows, prompting many importers to delay procurement orders and reduce transaction volumes.
The rising uncertainty surrounding shipping routes, logistics costs, and delivery timelines has made importers more cautious about committing to new orders, which is not putting much pressure on the local currency.
Meanwhile, the cryptocurrency market was mostly down after the April US Consumer Price Index came in at 3.8 per cent year-over-year, hotter than economists had estimated, with petrol prices doing most of the lift since the Iran war began.
Cardano (ADA) weakened by 1.7 per cent to $0.2730, Solana (SOL) lost 1.4 per cent to sell at $95.23, Ripple (XRP) shrank by 0.6 per cent to $1.45, Ethereum (ETH) went down by 0.5 per cent to $2,297.25, and Bitcoin (BTC) slipped by 0.2 per cent to $80,986.71.
On the flip side, Binance Coin (BNB) jumped 2.4 per cent to $678.01, Dogecoin (DOGE) gained 1.5 per cent to close at $0.1120, and TRON (TRX) appreciated by 0.1 per cent to $0.3490, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.