Transactions involving the sale of dollars by Deposit Money Banks and other entities at the Nigeria Autonomous Foreign Exchange Market (NAFEM) saw a significant decline, plummeting by $252 million to $84.1 million on Friday.
This notable drop marks a 74 percent decrease from the $331.1 million recorded in transactions at the official Nigeria Autonomous Foreign Exchange Market on Thursday.
Consequently, the naira depreciated against the dollar, slipping to N1,537/$ on Friday from N1,498/$ recorded at the close of trading activity on Thursday at the official market.
Data obtained from the FMDQ Securities Exchange revealed that forex turnover sharply decreased by 74 percent to $84.10 million on Friday from $336.11 million on Thursday. Notably, besides commercial banks, the Central Bank of Nigeria, oil firms, and multinationals also engage in dollar sales at NAFEM.
At the parallel market, the naira also experienced depreciation, trading at N1,670/$ on Friday, down from N1,600/$ recorded on Thursday, amid steady demand for the greenback.
Analyzing the week’s supply trends, data showed that the supply started low at $116.11 million on Monday, surged by $292.3 million to $381.92 million on Tuesday, dropped to $117.87 million on Wednesday, and then increased to $336.11 million on Thursday.
Market experts attribute the naira’s depreciation to robust demand for dollars from speculators and individuals traveling for business, tourism, education, and health purposes, indicating that this demand might persist.
The FMDQ report revealed that banks led others in selling $1.97 billion in the first week following the issuance of the CBN circular, which mandated banks not to exceed a new threshold in their FX prudential guidelines.
In response to these developments, banking institutions and IMTOs have initiated operational adjustments to accommodate the revised remittance framework, issuing notices to their customers in line with the directives from the Central Bank.
