How forex turnover increased in the official market in first half of 2024

• Dollar supply in the official market hit 74% in the first half of 2024 at $22.88 billion
• Analysis of quarterly transactions in the official market shows that turnover stood at $12.64 billion in the first three months of this year
• The naira, however, depreciated in the official and parallel markets at N 1520 per dollar, closing the gap in the markets

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

The volume of dollars traded in the Nigerian Foreign Exchange Market (NAFEM) increased yearly by 74% to $22.88 billion in the first half of 2024 from $13.11 billion recorded in the same period in 2023.

Analysis of quarterly transactions in the official market from FMDQ Exchange shows that FX turnover stood at $12.64 billion in the first quarter of 2024 and dipped quarterly by 19% to $10.24 million in the second quarter of 2024.

Turnover in the official market rises in the first half of 2024 Credit: Bloomberg/Contributor
Source: Getty Images

How dollar supply surged in the official market

However, a weekly analysis of June transactions in the official market shows that turnover stood at $1.05 billion in the first week of June, dropping by 21% weekly to $823.75 million in the second week of June.

Turnover declined in the second week of June by 36.8% weekly to $520.43 million.

According to reports, the decline reversed in the last week of the month when dollar supply increased by 80.6% to $940.17 million.

The naira closes gaps in official and black markets

Meanwhile, the Nigerian currency, the naira, depreciated in the official market on Thursday, June 4, 2024, at N520 per dollar as against the N1,512.77 it was traded the previous day.

In the parallel market, the naira fell to N1,520 on Thursday, June 4, 2024, the same value as the official market, closing the gap in the exchange rate markets.

The exchange rate had widened by N7 the previous day, according to a report by Legit.ng.

The naira has been on a downward trend since May after emerging as the best-performing currency in the world in April and reversed fortunes a week later.

BDCs blame the CBN for the naira’s crash

Bureau de Change (BDC) operators blamed the freefall of the naira on CBN’s action, which halted forex sales to the operators.

The operators say the naira fared better when the apex bank resumed its weekly FX intervention, selling $10,000 to the operators.

A Bloomberg report said that the naira is the worst-performing currency in the world in the first half of 2024.

The report said the naira depreciated for nine consecutive days in May, according to data from FMDQ Exchange.

Naira displaces as Africa's best currency

Legit.ng previously reported that the Kenyan shilling has risen to a 15-month high against the US dollar.

The last time the shilling performed this strong was in March last year, rising from Shs161 per dollar to Shs 128.66 to remain one of the best-performing currencies in Africa.

Reports show that the performance is due to improved agricultural export inflows as dollar demand thaws among importers.

Source: Legit.ng