The foreign exchange turnover for July reached N11.48 trillion ($7.39 billion) at Nigeria’s official trading window, marking an increase from the N10.01 trillion traded in June. This data was highlighted in the July financial markets report published by FMDQ, the platform for official foreign exchange trading in Nigeria.
In dollar terms, the FX market turnover for July saw a 10.02 per cent month-on-month rise, increasing by $0.67 billion to $7.39 billion, compared to $6.72 billion in June.
During the same period, the naira depreciated against the dollar, with the spot exchange rate rising by 4.88 per cent (N72.58), closing at an average of N1,560.32/$1 in July, up from N1,487.74/$1 in June. Exchange rate volatility also heightened in July, with the naira trading between N1,500.32/$1 and N1,621.12/$1, as opposed to June’s narrower range of N1,473.66/$1 to N1,510.10/$1.
By the end of the week, the naira had appreciated slightly by 62 basis points, settling at N1,570.14/$1 on the NAFEM platform. The week’s turnover was $120.81 million, with an intra-day trading range between a high of N1,606/$1 and a low of N1,496/$1.
FX turnover, representing the total value of transactions in the foreign exchange market, reflects increased trading activities during the reviewed period.
Meanwhile, a report from the Central Bank of Nigeria revealed that the naira’s average exchange rate at the Nigerian Autonomous Foreign Exchange Market fell by 35.53 per cent to N1,304.72/$1 in the first quarter of 2024, down from N841.15/$1 in the final quarter of 2023.
Surveyed businesses expressed expectations that the naira would continue to depreciate over the next three months, starting in July, but anticipate a recovery and appreciation in six months. The report stated, “Respondent firms expect the naira to depreciate in the current month, next month, and over the next three months, but appreciate in the next six months, with indices recorded at -22.6 points, -16.5 points, -4.8 points, and 13.7 points, respectively.
They also expect borrowing rates to rise, as confidence indices stood at 15.0, 14.3, 18.3, and 17.4 points across the review periods. At the same time, their perception of inflation remained high, with 72.8 points indicating strong sentiment among large firms that the current 34.19 per cent inflation rate is excessive.
Additionally, the CBN reported a significant surge in remittance inflows, which reached $553 million in July 2024—a 130.00 per cent year-on-year increase compared to July 2023. The apex bank attributed this growth to recent policy measures aimed at enhancing liquidity in Nigeria’s foreign exchange market. These measures include licensing new international money transfer operators and adopting a willing buyer-willing seller model, ensuring that IMTOs have timely access to naira liquidity.
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Analysts at Meristem Research expressed optimism that remittance inflows would continue their upward trend, supported by these policies and further strategic efforts to stabilize the FX market.
