The daily foreign exchange turnover at NAFEX, the official platform where forex is traded, dropped to $84.3 million, representing the lowest point in approximately ten weeks.
This decline was highlighted by the latest trading data from FMDQ, which Naijaonpoint has been tracking since the inception of the official forex market.
Prior to today, the record low daily turnover was $66.4 million, which occurred on February 19, 2024.
Despite the dip, the FMDQ reported a daily turnover of $86.6 million on April 19, 2024. The month also witnessed a significant spike with a daily turnover reaching $309 million on April 26, 2024.
Importance of Daily Turnover: The daily turnover is a crucial indicator of forex liquidity in the official market, as it reflects the volume of trades executed on the exchange. This metric is vital for understanding market dynamics and guiding investment and economic decisions.
On the first day of the week, the official exchange rate strengthened, closing at N1,354.21 against the dollar— the strongest the Naira has been in May.
Nigeria’s forex market has faced significant challenges, primarily due to fluctuations in global oil prices and economic policies that affect liquidity.
Despite recent volatility in the exchange rate, the Naira has shown signs of recovery, strengthening from a low of N1,600/$1 recorded in March.
This appreciation of the Naira has had positive ripple effects across the economy, including a decrease in customs duties.
Furthermore, in a recent development, electricity distribution companies have announced a reduction in tariffs, attributing this change to the strengthening of the Naira. Tariffs were initially increased citing an exchange rate of N1,463.3/$1.