Forex turnover drops to lowest since January,  as naira settles above N1,600/$1

The forex turnover on the FMDQ, where the exchange rate trades officially, closed at a turnover of just $61.9 million, the lowest since January 2024.

This is also the second-lowest daily average turnover this year, second only to the $59.6 million recorded on January 8, 2024, which is the lowest this year.

The month of January saw a remarkably low forex turnover as the central bank struggled to find a strategy to restore confidence in the country’s forex policy.

However, since then, the forex market has been stable despite more than 40% depreciation so far this year.

According to data from the FMDQ, the exchange rate closed trading on Tuesday at N1,601/$1, a slight appreciation from the N1,617/$1 reported on Monday.

The intraday highs and lows for the week also recorded N1,623 and N1,560, respectively, suggesting further weakening on the high end of trades.

However, the market turnover of just $61.9 million fell from the $77 million reported a day earlier.

Incidentally, the $77 million reported on Monday was also the lowest since January, suggesting that the forex market might be experiencing a squeeze.

One trader noted  that this could be a result of the “end hunger” protest that has engulfed most parts of the country, affecting businesses.

Another source suggests this could also be due to the massive stock market sell-offs reported on Monday.

Meanwhile, on the parallel market where the exchange rate is sold unofficially, trades were quoting around N1605/$1, in line with the official rates.

Nigeria’s external reserve is also $36.8 billion as of August 5, 2024.