By Elizabeth Adegbesan

Despite the volatility  experienced in the Nigeria’s foreign exchange market in the past one month, the volume of dollars traded (turnover) in the Nigerian Foreign Exchange Market, NAFEM, window rose by 23.8  per cent, month-on-month (MoM) to $2.23  billion in October 2023 from $1.8 billion in September, reflecting increased foreign exchange inflow in the economy during the period.

Vanguard findings from the weekly transactions in NAFEM as published by FMDQ showed that turnover recorded rapid swings across the four weeks on the month from $326.44 million in the first week of October to $642.89 million in the last week, but melted down to $163.04 million in the last two trading days of the month.

Meanwhile, the local currency lost N59.95 in NAFEM during the month.

Data from FMDQ Exchange showed that the Naira depreciated to N815.32 per dollar in the Investors and Exporters (I&E) window at the end of October  2023 from N755.27  per dollar traded on September 29th, 2023.

In the parallel market the naira depreciated by N170.

The parallel market rate closed at N1,170 per dollar at the end October from N1,000 per dollar on September 29th, 2023.

Consequently, the gap between the official and parallel market exchange rates widened to N354.68  per dollar on October 31st 2023 from N244.73 per dollar on September 29th.

Financial analysts have stressed the need for prudent management of the country’s foreign reserves to meet liquidity demand and Naira defense.

In their financial outlook for this week, analysts at Cowry Asset Management Plc said: “Nigeria’s foreign exchange reserves, while not at the peak, have indeed sparked concerns regarding the nation’s capacity to fulfill import requirements and meet its debt obligations. It’s worth noting that despite the recent decline, Nigeria’s foreign exchange reserves are still in a relatively robust position, equivalent to covering approximately 4.4 months of current external payments and Cowry Research thinks that it underscores the need for prudent management of these reserves to ensure the country’s economic stability and its ability to meet liquidity demand and Naira defense.”

According to the Central Bank of Nigeria’s, CBN, data on ‘‘Movement in Reserve’’, gross foreign exchange stood at $33.37 billion as at October 30th, 2023, representing a 0.42 percent increase when compared to $33.23 billion recorded as at September 29th, 2023.

Meanwhile, the naira retained some stability yesterday exchanging at N1, 170 per dollar in the parallel market. 

However, the naira appreciated in the Nigerian Foreign Exchange Market (NAFEM) yesterday to N786.02 per dollar.

Data from FMDQ showed that the indicative exchange rate for the I&E window fell to N786.02 per dollar from N815.32 per dollar on Tuesday, indicating N29.3 appreciation for the naira.