Value of foreign exchange transaction increases by N65% in June

The value of foreign exchange transacted in the Investors’ and Exporters’ window rose by 65.79 per cent month-on-month between May and June 2023.

According to data obtained from the FMDQ Exchange, the Central Bank of Nigeria (CBN), authorised dealers and their clients traded N4.77 trillion ($7.72 billion) worth of foreign exchange in June.

The value of forex transacted rose by N1.89 trillion ($1.51 billion) in June compared to the N2.87 trillion ($6.21 billion) traded in May.

Within the two months in review, the total foreign exchange transactions recorded was N7.65 trillion or $13.94 billion.

The 65.79 per cent month-on-month increase followed President Bola Tinubu’s declaration during his presidential speech on May 29, 2023, that he will review the foreign exchange market to increase liquidity.

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He made the promise to assure foreign investors complaining of scarcity of forex and multiple forex rates that have made repatriation of earnings impossible for them.

“We shall ensure that investors and foreign businesses repatriate their hard-earned dividends and profits home,” Tinubu said.

He also stated that: “Monetary policy needs thorough house cleaning. The Central Bank must work towards a unified exchange rate.

“This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.”

Following the statement, Tinubu has suspended the governor of the Central Bank of Nigeria (CBN) and also collapsed the multiple exchange rates to a single rate in the Investors’ and Exporters’ window.

While liquidity rose amid the monetary policy review, the single exchange rate in the I&E window has been on the rise, as the naira to dollar rate last traded at N768.60/$1 on Thursday, against the N664.04/$1 rate the CBN devalued the naira to on June 14, 2023.

Also, the foreign reserves dropped to a two-year low of $33.94 billion as of Thursday, July 25, compared to the $35.14 billion reported on May 26, three days before former President Muhammadu Buhari left office.

Meanwhile, the total Foreign Exchange Derivatives recorded in June was N3.91 trillion ($6.34 billion), from N2.40 trillion ($5.19 billion) in May.