The value of foreign exchange transactions recorded on the official Nigeria Autonomous Foreign Exchange Market has risen to $584m, according to data posted on the FMDQ Exchange on Tuesday.
This represents a significant increase from the $440m daily
transaction previously recorded on the platform.
The development came as the national currency weakened
against the United States dollar at the official market on Tuesday.
It closed at N1433/dollar, compared to N1419/dollar recorded
on Monday.
Meanwhile, according to data from FMDQ Security Exchange,
the forex turnover increased to $584.53m on Tuesday from $440.13m recorded on
Monday indicating an increase of $144.4m or 32.8 per cent.
The improved liquidity is following moves by the Central
Bank of Nigeria to stabilise the foreign exchange rate.
However, aside from commercial banks, the Central Bank of
Nigeria, oil firms, and multinationals also sell dollars at the Nigerian
Autonomous Foreign Exchange Market.
Last week, the apex bank rolled out new circulars and
guidelines to boost liquidity and narrow the gap between the parallel and
official rates of the foreign exchange market. In its most significant foreign
exchange guideline, last week, the CBN ordered banks to adjust their FX
exposures.
In its circular titled, “Harmonisation of Reporting
Requirements on Foreign Currency Exposures of Banks”, the apex bank expressed
worry over the growing trend of banks holding large foreign currency positions.
It said, “The Central Bank of Nigeria has noted with concern
the growth in foreign currency exposures of banks through their Net Open
Position. This has created an incentive for banks to hold excess long foreign
currency positions, which exposes banks to foreign exchange and other risks.”
The CBN mandated that banks’ NOP must not exceed 20 per cent
short or 0 per cent long of the bank’s shareholders’ funds going forward. It
gave a February 1, 2024 deadline to those who had exceeded its limit.
In response, the national currency gained thrice at the
official market following the adjustments.
The naira closed at N1,455.59/$ on Wednesday, 1,445/$ on
Thursday, and N1435.53/$ on Friday last
week.
After trading on Tuesday, the naira depreciated marginally
by 0.85 per cent as the dollar was quoted at N1,433.89, stronger than N1,421.70
quoted on Monday at the NAFEM market.
However, a Bureau De Change Operator said the dollar was
traded between N1,480 and N1,485 to the dollar at the parallel market.
He stated, “Today’s market was not too good but the dollar
was sold between the rate of N1,480 and N1,485 to the dollar.
Abubakar Taura, said, “Dollar increased to N1,460 today and
that is the last price.”
However, another BDC, Suraju, complained of the exorbitant
price of the dollar, adding he didn’t trade with the greenback.
He said, “I don’t know the price for today because I didn’t
sell at the market. The price for the dollar is too much and I can’t afford
it.”
However, economic managers have said the naira will firm up
in both markets in the coming days.