Nigeria’s foreign exchange market recorded a sharp drop in activity last week, with total turnover falling 30.23% to $2.37 billionThe naira closed the week at N1,331.20 per dollar, a 0.35% decline from its Monday opening rate of N1,326.51FX derivatives trading collapsed by 93.74% week-on-week, while Nigeria’s external reserves rose 0.33% to $54.67 billionPAY ATTENTION: Find it fast with our new search feature at Legit.ng! Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.The naira weakened against the US dollar last week as activity in Nigeria’s foreign exchange market declined sharply, with total turnover falling 30.23% to $2.37 billion, FMDQ Group data showed.Foreign exchange turnover fell from $3.39 billion in the week ended 11 September to $2.37 billion in the seven days to 18 September, representing a decline of about $1.03 billion.Nigeria’s foreign exchange turnover drops to $2.37 billion as trading activity slows. Photo: Bloomberg Source: Getty ImagesThe drop in market activity came as both spot and derivatives transactions declined, with derivatives recording the sharper contraction.PAY ATTENTION: From breaking news to viral moments. Follow Legit.ng on Instagram!FMDQ Group Chief Operating Officer Tumi Sekoni said the weekly decline was driven by a 21.06% fall in FX spot transactions and a 93.74% drop in derivatives trading, Punch reports.Naira records weekly lossThe naira closed trading at N1,331.20 per dollar on Friday, compared with N1,326.51 at the start of the week.That represented a 0.35% decline in the naira’s value against the dollar during the week.The naira weakened by N4.77 between Monday and Thursday before recovering marginally by N0.08 on Friday.The dollar traded between N1,329.50 and N1,334.50 during Friday’s session.Trading activity also increased on the final day of the week, with interbank turnover rising to $162.67 million from $84.22 million on Thursday.The number of deals increased to 127 from 104 a day earlier.Friday’s turnover was the highest since Tuesday, when interbank trading reached $262.12 million.In the parallel market, the dollar traded at N1,390, leaving a gap of about 4.1% between the parallel-market rate and the official closing rate.FX derivatives trading plungesForeign exchange derivatives turnover fell 93.74% to $26.78 million from $427.99 million in the previous week.All derivatives transactions during the week were FX forwards.Spot market turnover also declined, falling 21.06% to $2.34 billion from $2.96 billion a week earlier.Spot transactions accounted for 98.87% of total foreign exchange turnover, while derivatives represented 1.13%.Average daily FX turnover fell to $473.26 million from $678.33 million in the previous week, pointing to weaker trading activity across the market.Interbank dollar turnover rises to $162.67 million as FX trading picks up on Friday.
Photo: Nurphoto Source: Getty ImagesDollar demand weighs on nairaAnalysts at Cowry Assets Management said sustained demand for the US dollar contributed to pressure on the naira as investors reassessed returns on dollar-denominated assets following recent interest-rate decisions by the US Federal Reserve and Bank of Japan.The analysts said portfolio adjustments added pressure on the naira but noted that the relatively limited movement suggested that the currency remained broadly stable despite increased demand for foreign exchange.Nigeria’s reserves riseEarlier, Legit.ng reported that Nigeria’s external reserves increased 0.33% week-on-week to $54.67 billion, extending the recent improvement in the country’s foreign exchange buffer.Analysts said the higher reserves could provide additional support for FX market liquidity and the Central Bank of Nigeria’s capacity to meet legitimate dollar demand.Cordros Research expects the naira to remain broadly stable in the near term, supported by portfolio inflows, relatively firm investor sentiment and a widening current account surplus. Source: Legit.ng Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master’s degree from the University of Lagos.
He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng. CBN – Central Bank Of NigeriaNaira Theodore barrett Happy birthday prayers Demetress bell Boy study medicine surgery
