The Nigerian official foreign exchange (FX) market experienced a sharp decline in activity in August 2024. Data from FMDQ reveals that FX turnover fell by 25 per cent, dropping total turnover from $4.34 billion in July to $3.25 billion in August. The daily average turnover also declined and fell from $189.42 million in July to $144.71 million in August.
The naira appreciated slightly in the official market. The currency closed at N1,598.56 per dollar on Thursday, up from N1,606.56 recorded on Wednesday. This represents a gain of N8.00. However, the naira weakened in the black market, falling to N1,625 per dollar from N1,620 the previous day.
This drop in FX turnover indicates growing challenges in accessing foreign currency and suggests increasing market strain. The lowest FX turnover in August was $61.9 million, a significant drop from $108.16 million in July. These liquidity constraints put pressure on the naira and contribute to its depreciation. Despite the Central Bank of Nigeria’s Retail Dutch Auction in early August, the naira has depreciated throughout the month.
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