NAFEM Forex Turnover Soars 61% to $43 Billion

The turnover in the Nigerian Foreign Exchange Market (NAFEM) surged by 61.9% year-on-year (YoY), reaching $43.09 billion in the first 11 months of 2024, up from $26.6 billion during the same period in 2023.

Quarterly data from FMDQ revealed that in Q1 2024, NAFEM turnover was $12.64 billion, but it saw a 19% decline to $10.24 billion in Q2 2024. The downward trend persisted in Q3 2024, with turnover dropping by 0.87% to $10.15 billion. However, October saw a sharp recovery, with monthly turnover rising 63% to $5.4 billion, up from $3.31 billion in September. This upward momentum continued in November, with turnover increasing another 13.5% to $6.13 billion.

Despite the positive turnover growth, the naira displayed mixed performance in the forex market in November. In NAFEM, the naira strengthened by N2.8 (0.16%) to N1,672.69 per dollar at the close of November, compared to N1,675.49 per dollar at the end of October. In contrast, the naira weakened by N10 (0.5%) in the parallel market, where the dollar closed at N1,745, up from N1,730 in October. As a result, the gap between the NAFEM and parallel market rates widened to N72.31 per dollar in November, compared to N54.61 in October.

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) expressed concerns over the ongoing pressure on the exchange rate, highlighting the persistent high demand in the market. In its Communique No. 155, the MPC urged the CBN to explore additional measures to enhance foreign exchange market liquidity.

The MPC’s statement noted: “Members expressed concern over persisting exchange rate pressure, reflecting continued high demand in the market. Consequently, the Committee urged the Bank to explore measures to boost market liquidity.”