The volume of dollar traded (turnover) in the Nigerian Foreign Exchange Market, NAFEM, increased month-on-month (MoM) by 30 percent to $4.34 billion in July from $3.33 billion in June.
Vanguard analysis of weekly transactions in the window as published by FMDQ showed that turnover stood at $740.92 million in the first week of July and increased by 39 per cent to $1.03 billion in the second week.
However, turnover fell by 10.3 percent to $923.67 million in the third week but ticked up by 10.4 percent to $1.02 billion in the fourth week.
In the last three days of July, turnover stood at $616.49 million.
Meanwhile, the naira depreciated by N103.43 or 6.8 percent to N1608.73 per dollar in NAFEM on July 31st, 2024 from N1,505.3 per dollar traded on June 28th, 2024.
Similarly, the naira depreciated by N95 in the parallel market.
Vanguard gathering from black market traders showed that the exchange rate for the market rose to N1,595 per dollar on July 31st, 2024 from N1,500 per dollar on June 28th, 2024.
Consequently, the margin between the parallel market rate and NAFEM rate widened to N13.73 per dollar on July 31st, 2024 from N5.3 per dollar recorded on June 28th ,2024.
However, financial analysts have projected stability in foreign exchange (FX) rate by half year (H2) 2024 on the back of absence in market distortion and increased foreign exchange inflows.
In their half year 2024 Nigeria Economic outlook, analysts at Cowry Asset Management Limited said: "The performance of the local currency in H2' 2024 will depend on the interplay of various factors around demand for FX and supply from the CBN even as the Naira awaits catalysts and positive policy directions that could steer the course.
" However, the CBN is likely to maintain a relatively tight monetary policy stance, which exert a downward pressure on the local currency as well as limit the liquidity levels in the FX market. "We project a support level of N1,700 for financial year, FY'24, we note that the Naira could rebound significantly, should oil production improve significantly, subsidies are eliminated, and the local sourcing of oil for domestic refining commence in earnest."
