Nigeria foreign exchange market got a boost of Forex from $38.1 to $63.44 million an increase of 66.42%. The increase is a boost in liquidity in the foreign exchange market. According to the data released by FMDQ, forex turnover rose from $38.12 million last week Friday to $63.44 million on Monday representing a 66.42% increase day on day. While the increase in percentage terms appears to be high, daily turnover of $63.44 million is still far from the over $200 million recorded in January 2020.
Although the liquidity in the foreign exchange market appears to have improved, the volatility and uncertainty of the market remain, particularly due to liquidity shortages across markets. Liquidity remains quite tight in the foreign exchange market with the average turnover in the I&E market significantly down to about $45.5 million in the month of May compared to $297.5 million that was recorded in January.
Forex scarcity has persisted since the crash in oil prices coincided with the worldwide lockdown due to COVID-19. Currency speculators have thus patronised the parallel market thereby widening the disparity between it and the I&E window. The exchange rate on the I&E window appreciated marginally, closing at N386 to a dollar, compared to the N386.50 to a dollar that was reported on Friday, June 19, representing a 50 kobo gain. The stability of the Naira in the foreign exchange market continues, as the local currency was marginally strengthened at the Investors and Exporters (I&E) window. At the black market where forex is traded unofficially, the exchange rate remained stable at N455 to a dollar.
