Nigeria’s FX turnover falls 51% to $1.81bn
AI Executive Briefing
Gemini Flash AI~45s readNigeria's foreign exchange market experienced a significant contraction in the week ending November 6, with total turnover falling by over 51% to $1.81bn. This sharp decline in trading volume coincided with a marginal depreciation of the naira and weakened forward exchange rates.
Context & Background
- ✦The data is sourced from FMDQ, which tracks transactions between authorized dealers and their customers.
- ✦The market is currently monitoring liquidity conditions, with N923.10bn in expected inflows from Treasury bills and Open Market Operations maturities.
Key Figures & Named Entities
FMDQ:Reported that average daily FX turnover fell to $361.67m from $742.51m.Forward Transactions:Declined by 69.93% to $22.20m from $73.83m.
Outlook & Next Steps
Analysts expect the naira to remain relatively stable in the near term, supported by FX reserves and the current account surplus, while market liquidity will be influenced by the reinvestment of N923.10bn in maturing instruments.
Key Takeaways
AI Summary- Nigeria's foreign exchange market turnover dropped by 51.29% to $1.81bn for the week ending November 6.
- Spot transactions, which fell by 50.91% to $1.79bn, were the primary driver of the overall decline in market activity.
- Forward exchange rates across all maturities weakened, signaling market expectations of further naira depreciation.
Key Facts:Week ended November 6: Weekly FX turnover fell to $1.81bn for the week ended November 6, down from $3.71bn the previous week.July: The market experienced a 46.57% weekly contraction in July, when turnover fell to $1.63bn.This week: The domestic financial market is expected to receive a combined N923.10bn from Treasury bills and OMO maturities.
Editorial Excerpt
Nigeria’s foreign exchange market turnover fell sharply by 51.29% to $1.81bn for the week ended November 6, down from $3.71bn a week earlier.
Frequently Asked Questions About This Story
What was the primary driver of the decline in total FX turnover?
The decline was primarily driven by spot transactions, which fell by 50.91% to $1.79bn and accounted for approximately 97.3% of the overall reduction in dollar trading.
How did forward exchange rates perform during the reporting period?
Forward exchange rates weakened across all reported maturities, with the one-year rate depreciating by 0.6% to N1,557.65 per dollar.
