Naira weakens against dollar amid increased FX turnover

The Naira experienced a significant depreciation against the dollar in July 2024, falling by ₦72.58 as Foreign Exchange (FX) turnover surged to $7.39 billion, according to the latest FMDQ financial market report.

In the month of July, Nigeria’s FX turnover reached ₦11.48 trillion, a notable increase from the ₦10.01 trillion recorded in June.

In dollar terms, this represents a 10.02 percent month-on-month rise, up by $0.67 billion from $6.72 billion in the previous month.

Despite the rise in turnover, the Naira’s value weakened, with the spot exchange rate climbing by 4.88 percent to an average of ₦1,560.32 per dollar in July, compared to ₦1,487.74 per dollar in June.

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The volatility in exchange rates also increased, with the Naira trading between ₦1,500.32 and ₦1,621.12 per dollar in July, compared to the previous month’s range of ₦1,473.66 to ₦1,510.10 per dollar.

In contrast, the Naira appreciated marginally to ₦1,570.14 per dollar in the official market last week, closing with a turnover of $120.81 million. The intra-day high and low were ₦1,606 and ₦1,496 per dollar, respectively.

Looking ahead, the Central Bank of Nigeria’s Business Expectations Survey suggests that the Naira may continue to depreciate against the dollar over the next three months but anticipates a potential appreciation in the subsequent six months.

The July data highlights a period of increased FX market activity and heightened currency volatility, underscoring the challenges facing Nigeria’s foreign exchange market.