Dollar Supply in Forex Market Hits $5.4 Billion as Naira Trades at New Rates

• Foreign exchange turnover in the official window rose by 74%, hitting $5.4 billion in October
• Information from the FX market shows that dollar supplies crashed by 19% to $10.24 billion in the second quarter of 2024
• However, the Nigerian currency, the naira, depreciated in the official and parallel markets in the month under review

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

The volume of dollar supplies, also known as turnover in the Nigerian Autonomous Foreign Exchange Market (NAFEM), increased monthly by 74% to $5.4 billion in October from $3.31 billion traded in September.

Data from the FMDQ Exchange shows that turnover stood at $12.64 billion in the first quarter of 2024 and declined by 19% every quarter to $10.24 billion in the second quarter of 2024.

The naira ends October poorly

In the third quarter of this year, turnover rose by 6.4% to $10.9 billion.

However, the Nigerian currency, the naira, depreciated in the official and parallel markets in the month under review.

The naira lost 8.6% of its value, depreciating by N133.45 to N1,675.49 per dollar in the official FX market, from N1,541.94 per dollar traded in September end.

The gap between official and parallel markets narrows

Also, the naira fell by N25 or 98% in the parallel market.

According to investigations, the naira's exchange rate rose to N1,730 per dollar in the black market at the end of October from N1,795 per dollar in September.

As a result, the margin between the black market and the official window narrowed to N54.61 per dollar from N163.06 recorded in September.

The naira depreciates

Legit.ng reported that the naira lost more value against the United States dollar in both the official and black foreign exchange markets. 

According to data from FMDQ securities, the naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX), the official market, closed on Monday, November 5, 2024, at the N1,676.90/$1 exchange rate.

Western Union and other IMTOs increase dollar inflows to Nigeria

Legit.ng earlier reported that according to data by the Central Bank of Nigeria (CBN), dollar inflows by international money transfer organisations (IMTOs) to Nigeria grew by 47% to $2.33 billion in the first six months of 2024 from $1.58 billion in 2023.

The development came when the apex bank implemented policy measures, allowing eligible IMTOs access to naira liquidity at the official FX window.

The apex bank recently implemented some policy measures to make FX markets more efficient and raise remittance flows via formal channels.

Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.