Dollar Supply in Official Market Surges to $43 Billion as Naira Trades at New Rates
- The foreign exchange market recorded an improved FX turnover in the first 11 months of 2024
- Data shows that foreign exchange turnover in the official window rose 61.9% to $43 billion in the review period
- MDQ Exchange data on quarterly transactions in the market shows that FX turnover stood at $12.64 billion in the first three months of 2024
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Foreign exchange turnover in the Nigerian Autonomous Foreign Exchange Market (NAFEM) increased yearly by 61.9% to $43.09 billion in 11 months from $26.6 billion in the same period in 2023.
Data from the FMDQ Exchange on quarterly transactions in the market shows that FX turnover stood at $12.64 billion in the first three months of 2024 and dropped quarterly by 19% to $10.24 billion in the second quarter of 2024.
Source: Getty Images
Breakdown of forex turnover in 2024
The downward spiral continued in the third quarter when turnover dropped by 0.87% to $10.15 billion.
PAY ATTENTION: Legit.ng Needs Your Help! Take our Survey Now and See Improvements at LEGIT.NG Tomorrow
In October, the turnover increased by 63% to $5.4 billion from $3.31 billion in September and rose again by 13.5% monthly to 6.13 billion in November.
Naira’s volatility continues
However, in November, the naira experienced a mixed performance in the foreign exchange windows.
According to reports, the Nigerian currency appreciated by N2.8 or 0.16% to N1,672 per dollar at the end of November from N1,675.49 per dollar it traded in October.
The local currency, however, lost N10 or depreciated by 0.5% in the parallel market.
Dealers in the black market traded the US greenback at N1,745 at the end of November as against the N1,730 it traded in October.
Consequently, the gap between the parallel market rate and the official window grew to N73.31 per dollar in November from N54.61 in October.
CBN introduces a new matching system
Vanguard reports that the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) members raised concerns over the continued pressure on the exchange rate in their communique, urging the apex bank to seek alternative means for Forex liquidity.
The development comes as the CBN mandated banks in the interbank Forex market to move to the Bloomberg BMatch trading system for FX transparency.
The implementation began on December 2, 2024, and is designed to boost operational efficiency and transparency of Nigeria’s forex system.
In the circular seen by Legit.ng, CBN said that the BMatch platform provides an automated system for matching trades, boosting market integrity and facilitating better price discovery.
Dollar sells cheaper in the black market
Legit.ng earlier reported that on Monday, December 2, 2024, the Nigerian currency rose against the US dollar in the parallel market as the first FX trading day began on the Electronic Foreign Exchange Matching System (EFEMS) through the Bloomberg BMatch System.
The naira gained N20 as the US greenback traded at N1,730 against N1,750 on Friday, November 29, 2024, in the parallel market.
Last week, the Central Bank of Nigeria (CBN) issued a directive asking all banks operating in the interbank foreign exchange market to move to the Bloomberg BMatch System for FX trading.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
PAY ATTENTION: Legit.ng Needs Your Opinion! That's your chance to change your favourite news media. Fill in a short questionnaire
Source: Legit.ng
