NAFEM Forex Records Massive Growth, Hits billions As Dollar Trading Surges 61%

NAFEM Forex Records Massive Growth, Hits billions As Dollar Trading Surges 61%

In an impressive turnaround, the volume of dollars traded in Nigeria’s Foreign Exchange Market (NAFEM) surged by 61.9%, hitting $43.09 billion in the first eleven months of 2024 (11M’24),…READ MORE…

compared to $26.6 billion during the same period in 2023.

According to FMDQ’s quarterly market data, turnover stood at $12.64 billion in Q1’24, but saw a decline of 19% to $10.24 billion in Q2’24. The downward trend continued into Q3’24, with turnover dipping by 0.87% to $10.15 billion. However, there was a significant rebound in October, with a 63% month-on-month increase to $5.4 billion, followed by a further rise of 13.5% to $6.13 billion in November.

Despite these gains, the naira displayed mixed performance in the foreign exchange market in November. In NAFEM, the naira appreciated by 0.16% (N2.8) to close at N1,672.69 per dollar, compared to N1,675.49 in October. However, in the parallel market, the naira saw a 0.5% depreciation, dropping N10 to N1,745 from N1,730 in October.

This shift resulted in a widened gap between the NAFEM rate and the parallel market rate, increasing to N72.31 in November, up from N54.61 in October.

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) expressed ongoing concerns over the persistent pressure on the exchange rate. The committee emphasized the need for further measures to enhance liquidity in the foreign exchange market.

As stated in their latest communiqué: “Members expressed concern over the continuous high demand in the market and urged the Bank to consider strategies to boost market liquidity.”

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