The volume of dollar traded (turnover) in the Nigerian Foreign Exchange Market, NAFEM, declined month-to-month (MoM) by 37.4 percent to $3.47 billion in April 2024 from $5.54 billion in March 2024.
Vanguard analysis of weekly transactions in the market as published by FMDQ showed that turnover stood at $836.66 million in the first week of April but fell by 49.5 per cent to $420.33 million in the second week due to the three days Eid-al-Fitr holidays observed within the week.
However, turnover increased by 133.5 percent to $981.77 million in the third week and fell by 12.3 percent to $860.54 million in the fourth week.
Turnover stood at $373.19 million in the last two days of trading activities in April 2024
Meanwhile, the naira depreciated in both the official and parallel market segments during the review period.
The naira depreciated by N81.57 to N1390.96 per dollar in NAFEM on April 30 from N1309.39 per dollar traded on March 28, 2024.
Similarly, the naira depreciated by N20 in the parallel market.
Vanguard gathering from black market traders showed that the exchange rate for the market rose to N1,310 per dollar on April 30 from N1,290 per dollar on March 28, 2024.
Consequently, the margin between the parallel market rate and NAFEM rate widened to N80.96 per dollar on April 30 2024 from N19.36 on March 28, 2024.
In their Economic and Financial Outlook for the first half of the year (H1’24), analysts at Cowry Asset Management plc expect the Naira to moderate in the second quarter of 2024 (Q2’24)
“The Naira has experienced significant appreciation against the dollar starting from the month of March
to close at N1,080 per dollar and N1,136.04 per dollar at the Parallel and NAFEM markets respectively by the close of business on April 15, 2024.
“The Government’s plan to issue foreign currency denominated bonds in June will further boost forex liquidity in Q2′ 24.
“The ability of CBN to sustain the current Naira defense is however doubtful given the huge cost of this adventure. We, therefore, expect that the current Naira appreciation will moderate in Q2 2024.