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Daily FX turnover hits record high of $1.1bn, highest in 7 years, as Naira sustains rally

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Customs increases FX rate for collection of duties from N770/$ to N783/$

Turnover at Nigeria’s foreign exchange market on Tuesday climbed to the highest in a single day since 2017, as a prolonged dollar shortage that has dampened economic activity for years continued to ease.

According to data from FMDQ Securities Exchange, the sum of $1.085 billion was traded on the day, up 27 percent from $857.78 million traded last Thursday (the final trading day before a two-day Easter break) and is almost five times the average daily transactions in the market since the start of the year.

The improved liquidity helped the naira extend its week-long winning streak, as the currency hit a three-month high of N1,278 per US dollar compared to N1,309 on Thursday.

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Speaking on the development, the Director of Research and Strategy at Lagos-based investment bank, Chapel Hill Denham, Tajudeen Ibrahim, said: “Liquidity is definitely returning to the market and that’s solely down to the CBN’s reforms.

“The last time we had the kind of average daily FX trades that we recorded in the first quarter of this year was before COVID in 2019.

“The CBN must now stay the course of the reforms”, Ibrahim noted.

Also speaking, the lead economist at CardinalStone, an investment bank, Olaolu Boboye, said “the payments of FX backlogs and improving carry trade opportunities are piquing investors’ interest”.

Dollar inflows into Nigeria have surged since the Central Bank of Nigeria (CBN) enticed foreign portfolio investors with higher interest rates on government debt and an undervalued naira.

The appreciation is also helped by the clearing of foreign exchange forwards backlog that had drained confidence in past reforms.

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