Forex Turnover Hits $242.60M as Naira Gains Marginally to N1,082.32/$1 in Official Market
The forex turnover witnessed an impressive surge of 148.95%, reaching $242.60 million, fueled by a marginal gain of the Naira against the dollar on January 10, 2024. The official market maintained its position above the N1,000/$ threshold, showcasing a 0.66% appreciation of the domestic currency, closing at N1082.32 to a dollar, according to data from the NAFEM (Nigeria Autonomous Foreign Exchange Market).
This marked a noteworthy N7.19 gain, reflecting a 0.66% increase compared to the previous day’s close at N1089.51. The day’s intraday high and low were recorded at N1270.65/$1 and N700/$1, respectively, indicating a substantial N570/$1 spread.
Data from the official NAFEM window revealed a substantial forex turnover of $242.60 million at the close of trading, demonstrating an impressive 148.95% surge compared to the preceding day.
In the parallel forex market, where unofficial trading occurs, the Naira experienced a marginal gain. The exchange rate stood at N1240/$1, marking a 0.40% increase over the previous day’s close. Peer-to-peer traders quoted around N1252.60/$1.
Financial experts weighed in on the situation, emphasizing the importance of market and participant confidence for exchange rate stability. Mr. Olatunde Amolegbe, former President and Chairman governing council of the Chartered Institute of Stockbrokers, highlighted the need for efforts to boost confidence through strategies such as clearing FX commitment backs and addressing systemic issues for long-term stability.
Bismarck Rewane, Managing Director/CEO of Financial Derivatives Company Limited, anticipates continued volatility in the Naira due to persistent forex supply concerns. A scarcity of dollars is driving speculative buying, with market participants increasingly favoring long positions on the dollar while shorting the Naira.
As the financial landscape evolves, experts suggest sustained efforts toward structural changes, including enhanced security, improved infrastructure, increased foreign direct investments, and support for local production, to foster a more stable and resilient currency market.