Report Shows 47% Crash In Forex Turnover

Reports on Investors & Exporters window showed that the foreign exchange turnover of Naira against the United States of American dollar fell by 47.08 per cent in April.

This was disclosed in the monthly report of activities on the FMDQ which was released on Tuesday.

The FMDQ said that the “Spot FX market turnover was N2.18trn ($4.72bn) in April 2023, representing a MoM decrease of 47.08 per cent (N1.94trn) from the turnover recorded in March 2023 (N4.13trn).”

It further revealed that the Naira depreciated against the US Dollar, with the spot exchange rate ($/N) increasing by 0.34 per cent ($/N1.59) to close at an average of $/N463.09 in April 2023 from $/N461.50 recorded in March 2023.

Similarly, the exchange rate volatility increased marginally in April 2023 as the naira traded within an exchange rate range of $/N462.00 – $/N464.00 compared to $/N461.00 – $/N462.00 recorded in March 2023.

At the official market, the naira strengthened by 0.01% to close at N461.31/dollar on Monday; the naira at the parallel market, however, closed flat at N765/dollar.

In a research note, an analyst at South Africa-based lender, Absa Group, Nikolaus Geromont, said that “This discrepancy between the official and parallel markets is among the widest since the managed floating rate was introduced in 2016. (With) Tinubu calling for more flexibility in the exchange rate regime, we expect the naira to be upwardly adjusted to 530/USD after the presidential inauguration.”

The World Bank in April advised the Federal Government to unify the nation’s multiple exchange rate windows and carry out some other reforms to strengthen the economy and restore macroeconomic stability.