FX Market Sees Surge in Turnover as Naira Appreciates From N1,534 Per Dollar in Official Market
- The Nigerian foreign exchange market recorded a remarkable surge in the volume of turnover
- The FX market saw a rise in Forex turnover of $271.50 million, representing a 202.97% increase
- The Nigerian currency, the naira, recovered marginally against the US dollar by 2.36% in the official market
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
Turnover in the Nigeria FX market has experienced a remarkable rise of 202.97%, reaching $271.50 million, as the Nigerian currency recovers against the US dollar in the official market on Tuesday, February 13, 2024.
The recovery follows a drop in the naira’s value, which saw it fall to an all-time low of N1,534 per dollar on Monday, February 12, 2024.
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The Naira recovers in official market
The depreciation accompanied a 64.69% decline in Forex turnover, which plummeted to $89.61 million.
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However, the exchange rate degenerated in the parallel market, depreciating to N1,517 per dollar, representing a 1.78% decline from the previous rate.
The Nigerian currency appreciated by 2.36%, closing at N1499.07 to a dollar at the end of the trading day on Tuesday, February 14, 2024.
Data from NAFEM shows that the naira gained N35.32 against the dollar in the local market.
The official market recorded an intraday high of N1,550 per dollar and an intraday low of N1,000.
The data also shows Forex turnover surged to $271.50 million, representing a 202.97% rise from the previous day.
CBN's reforms working to calm FX markets
According to reports, the recent increase in Forex turnover came amid various reforms by the Central Bank of Nigeria (CBN), which issued several circulars to stabilise the foreign exchange market.
The development comes as foreign exchange inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose by 66.7% recently to $2.2 billion after commercial banks and financial institutions complied with the new directives of the CBN.
The apex bank issued about seven circulars and guidelines with new limits for net open positions. It removed restrictions on International Money Transfer Operators (IMTOs) Forex quotes as part of plans to boost liquidity in the FX market.
By the end of the first week in February, dollar inflows at the NAFEM window surged to $2.2 billion.
Nigeria witnesses highest FX inflows
The naira’s value at NAFEM had declined by 2.3%, closing the week at N1,469.97 per dollar with an intraday low of N830 and N1,550 per dollar at the official window.
In the black market, the naira’s value dropped to N1,470 to the dollar, indicating an 8.2% decline in the parallel market.
The development comes as the governor of the CBN, Olayemi Cardoso, told lawmakers that the country witnessed Forex inflows of over $1 billion in one week after a long time.
The rise in dollar liquidity has reportedly reaffirmed investors’ growing confidence in the Forex market.
Nigeria’s FX market hits $1.83 billion in one week
Legit.ng reported that Nigeria's official foreign exchange market recorded a total transaction volume of $1.83 billion weekly, showing increased FX activities.
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, confirmed the development during an interactive session and said the significant increase in FX transactions was due to reforms initiated by the CBN, yielding positive results in the market.
The rise in dollar liquidity has reportedly reaffirmed investors' growing confidence in the Forex market.
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Source: Legit.ng
