The volume of dollar traded (turnover) in the official Nigerian Foreign Exchange Market, NAFEM, increased year-on-year (YoY) by 95% to $12.68 billion in the first quarter of the year (1st quarter’24) from $6.5 billion in 1st quarter of 2023. The sharp increase reflects impact of recent measures by the Central Bank of Nigeria, CBN to liberalise the forex market and improve dollar supply into the country.

Vanguard analysis of data on daily transactions provided by FMDQ showed that the market recorded turnover of  $2.14 billion in January, which increased by 133.6 per cent to $5 billion in February and up by 10.8 percent to $5.54 billion in March. Analysis of transactions in March showed that turnover stood at $296 million on the first day of March and $1.15 billion in the second week.

In the third week, turnover fell by 26 percent to $848.36 billion and up by 48.5 percent to $1.26 billion in the fourth week. Turnover increased by 57 percent to $1.98 billion (highest weekly turnover in March) in the fourth week. Also, reflecting impact of the CBN’s measures, the nations external reserves rose 2.9 per cent, quarter-on-quarter (QoQ) to $33.885 billion in 1st quarter of 2024 from $32.912 billion at the end of the 4th quarter of 2024.

However, the naira recorded mixed performances in the parallel market and the official market in 1st quarter of 2024 Data from FMDQ showed that the Naira depreciated in NAFEM by 44.3 per cent to   N1,309.39   per dollar  at the end of 1st quarter of 2024, representing   from  N907.11  per dollar at the end of 4th quarter of 2023 But, the Naira appreciated by 3.1 per cent in the parallel market to N1,290   per dollar in 1st quarter of 2024 from N1,240 per dollar in 4th quarter of 2023.

Source: Vanguard