Naira gains N88.35 in official FX market despite liquidity drop 

The naira appreciated on Monday, the first trading day of the week, gaining N88.35 against the US dollar in the official foreign exchange (FX) market. This is despite a drop in market liquidity.

Data from the FMDQ Securities Exchange Limited showed that after Monday’s trading session, the naira gained 5.7 percent, with the dollar quoted at N1,552.92, compared to N1,641.27 recorded on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

FX market turnover, reflecting the total volume of currencies traded within a specific period, dropped sharply by 44.27 percent. On Monday, transactions totaled $343.71 million, a decline from $616.73 million exchanged on Friday at the NAFEM window.

The intraday exchange rate closed lower, printing at N1,682, compared to N1,675 on Friday. Similarly, the intraday low rate stood at N1,540 on Monday, up from N1,591 reported at the close of the previous week.

Meanwhile, the local currency maintained its position at N1,700 in the parallel market—often referred to as the black market—according to data from online FX platforms and street traders.

A report from Coronation Asset Management indicated that the NAFEM exchange rate declined by 0.61 percent last week (following a 5.54 percent drop the week before) to close at N1,641.27 per dollar.

This development brought the naira’s year-to-date depreciation to 44.73 percent, only 4.39 percent away from the total depreciation recorded in 2023.

In the parallel market, the naira also lost momentum, giving up its previous gains with a 1.76 percent decline to finish the week at N1,700.00 per dollar. Despite these shifts, the official market rate continues to trade at a 3.58 percent premium compared to the street market rate.

The Central Bank of Nigeria (CBN) reported a slight increase in gross foreign exchange reserves, which rose by $62.58 million (0.16 percent) to close the week at $38.67 billion.