September 08, (THEWILL) – The Nigerian Foreign Exchange Market (NAFEM) recorded a total of $3.30 billion turnover in the month of August, according to data obtained from the FMDQ platform. This constitutes a 31.1 percent dip compared to $4.79 billion traded in the 25 sessions in July.
The figures tracked by THEWILL during the 22 trading days in August also showed that the highest daily turnover was recorded on August 12 with $264.44 million, while the lowest volume occurred on August 6, when the market closed at $61,90 million.
During the just ended month, the domestic currency closed at N1,598.96 on the last trading day (August 30) constituting a 0.63 percent appreciation compared to N1,608,73 it opened on August 1.
The biggest depreciation rate was recorded on August 30 when the naira slumped to N1,598.56 to the dollar, while it registered the strongest value on August 21 with N1,543.84 to the dollar.
On Friday, August 30, marking the last trading week in the month, the Naira traded at N1,598.56 to the dollar – a marginal depreciation of N4.63 or 0.29 percent compared to the higher value of N1,593.93 to the dollar it had traded on the previous day.
The naira has recorded consistent depreciation since the ninth month of the year, September when it opened with N1,585.89 to the dollar. It thereafter dipped to N1,625,88, and further to N1,639,14, before landing at N1,593.32 to close the week on Friday, September 5.
Forex turnover has seen significant numbers during September which opened with $71,18 million, the lowest after $61.90 million on August 8; and began a surge that saw the market hit $209.61 million, the highest since August 12 when it recorded $246.44 million.
The last three days in the first week of September saw the forex turnover at $205.76 million, $185.79 million and $245.17 million.
This signals a positive performance that is likely to rule in the best of September as the Central Bank of Nigeria intensifies strategies to shore up the naira through improved forex inflow that impacts the foreign reserves.
These include the commencement of the $500 billion denominated domestic bond and the increase in diaspora remittances. Nigeria recorded $282.61 million as total direct foreign exchange remittances in the first quarter (Q1) of 2024. According to the World Bank, the Nigerian Diaspora of about 1.7 million population remitted $65.34 billion in three years to boost economic activities in the country
The parallel market traded average of N1610,00 to the dollar on Friday, September 5, signaling the target of the CBN to attain a convergence of the parallel and official markets as the local currency “stabilizes” in the horizon of N1,500 to the dollar.
This shows a massive depreciation of the naira compared to the N472 to the dollar it traded on June 13, 2023 before the floating of the domestic currency. The development was in line with President Tinubu’s “bold” reforms that saw the local currency tumble to N664.04 to the dollar on June 14, when the official devaluation of the currency occurred. This has become the Achilles’ heel of the troubled economy that is now consuming virtually every sector.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
