Nigeria’s Forex Market Sees Sharp Drop in Turnover, Naira Faces Pressure Amidst Dollar Surge

Amidst economic challenges, Nigeria’s official foreign exchange market, the Nigerian Autonomous Foreign Exchange Market (NAFEM), grappled with a significant 14.96% dip in turnover from N4.15tn to N3.66tn ($4.66bn) in October.

The US dollar appreciated 5.34% against the United States Dollar to close at an average of N797.43.

In the midst of this, the exchange rate volatility surged, showcasing a wide range of fluctuations between N741.85 and N993.82.

This unsettling trend in October marked the lowest point of the naira since the Central Bank of Nigeria’s market harmonization in June.

The Financial Markets Monthly Report from FMDQ revealed a broader economic impact, with total spot market turnover for all secondary market products dropping by 4.02% to N20.48tn in October.

The decrease was fueled by a collective decline in Money Market and Foreign Exchange activities, overshadowing the notable 29.04% increase in fixed income turnover.

As the country grapples with these challenges, the forex dynamics emphasize the need for strategic measures to stabilize the currency and restore market confidence.