Forex Turnover in NAFEM Rises by 61% to $43bn

The volume of dollar traded (turnover) in the Nigerian Foreign Exchange Market (NAFEM) rose Year-on-Year (YoY) by 61.9 percent to $43.09 billion in the first eleven months of 2024 (11M’24) from $26.6 billion in the corresponding period of 2023.

Details of the quarterly transactions in the market as published by FMDQ showed that turnover stood at $12.64 billion in the first quarter of 2024 (Q1’24) and fell quarter-on-quarter (QoQ) by 19 percent to $10.24 billion in the second quarter of 2024 (Q2’24).

The downward trend continued in Q3’24, when turnover declined by 0.87 percent to $10.15 billion. In October, the volume rose month-on-month (MoM) by 63 percent to $5.4 billion from $3.31 billion in September, and increased further by 13.5 percent MoM to $6.13 billion in November.

Meanwhile, the naira recorded mixed performance in the foreign exchange market segments in November.

In the NAFEM, the local currency appreciated by N2.8 or 0.16 percent to N1,672.69 per dollar at end of November trading as against N1,675.49 per dollar it closed in October.

However, the naira depreciated by N10 or 0.5 percent in the parallel market.

Dealers in this segment traded the dollars at N1,745 at the close of November as against N1,730 per dollar in October.

Consequently, the margin between the parallel market rate and NAFEM rate widened to N72.31 per dollar in November from N54.61 in October.

Members of the Central Bank of Nigeria, CBN, Monetary Policy Committee, MPC, in their Communique No. 155 were concerned over the continuous pressure on the exchange rate. They urged the CBN to look into other means to boost foreign exchange market liquidity.

The MPC Communique stated: “Members expressed concern over persisting exchange rate pressure, reflecting continued high demand in the market.

“Consequently, the Committee urged the Bank to explore measures to boost market liquidity.”