By Elizabeth Adegbesan

The volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the Nigerian foreign exchange market fell Month-on-Month (MoM)    by 22.4 percent to $1.7 billion in February 2023 from $2.19 billion in January 2023.

This represents the second consecutive monthly decline since December 2022.

Vanguard findings in the Central Bank of Nigeria, CBN, forex database show unstable movement in the transaction flow all through the month.

The weekly turnover in the window for February 2023 shows that $344.15 million was traded in the first  week.

But the turnover fell by 11.5 per cent to $304.32 million in the second week and up by 70 per cent to $518.8 million in the third week.

The upward trend reversed in the fourth week as turnover fell by 16 per cent to $434.08million.

Turnover stood at $102.46 million on the last two days of the fifth week.

Meanwhile, the naira depreciated by 50 kobo during the period as the indicative exchange rate of the window rose to N462 kobo per dollar on February 28th, 2023 from N461.5 per dollar on February 1st, 2023.

Similarly, the naira depreciated by N15 in the parallel market.

Vanguard findings showed that the exchange rate in the black market to N760 per dollar on February 28th from N745 per dollar on February 1st, 2023.

In a related development the Naira has remained scarce following the Central Bank of Nigeria’s CBN policies on the new naira notes.

Analysts and stakeholders in the economy noted that this situation may hamper economic growth leading to a decline in the country’s Gross Domestic Product (GDP).

In their macro economic outlook for 2023 titled “Cash Crunch and Macroeconomic Stability: A Scenario-Based Outlook for 2023”, the Nigerian Economic Summit Group said: “The cash scarcity associated with the currency redesign policy will likely slow economic growth as many productive activities have been halted due to the inability to access cash. “Furthermore, the uncertainty associated with this policy and its economic effects may contribute to volatile movements in macro-economic variables.”

On their part, analysts at Cowry Assets Management Plc, in their financial outlook for this week, projected an unabated demand of the naira saying: “In our opinion, the naira demand pressure is expected to stay unabating following the limited supply of the currency ahead of the general elections and the extension of the deadline for the old notes deposition.”