The Naira experienced a decline of N72.58 against the dollar, with Foreign Exchange turnover reaching $7.39 billion by the end of the official trading window in July 2024, compared to June figures.

In July, the foreign exchange turnover reached N11.48 trillion ($7.39 billion) at the official trading platform for the Nigerian currency, surpassing the N10.01 trillion recorded in the previous month.

This information was revealed in the monthly financial markets report for July released by the FMDQ, which operates the official foreign exchange trading platform. In dollar terms, the FX market turnover in July experienced a month-on-month increase of 10.02 percent ($0.67 billion), rising from $6.72 billion in June.

Additionally, the naira depreciated against the dollar, with the spot exchange rate rising by 4.88 percent (N72.58) to an average of $/1,560.32 in July, compared to $/1,487.74 in June.

The volatility of the exchange rate also escalated in July, with the local currency trading between $/1,500.32 and $/1,621.12, in contrast to the range of $/1,473.66 to $/1,510.10 observed in June 2024.

By the end of the week, the naira appreciated by 62 basis points to N1570.14/$, concluding the week at the NAFEM.

The turnover for that week was $120.81 million, with intra-day highs and lows of $1606 and $1496, respectively. FX turnover represents the total value of all transactions conducted in the foreign exchange market in January, indicating heightened trading activity during the reviewed period.

A recent report from the Central Bank of Nigeria noted that the average exchange rate of the naira against the dollar at the Nigerian Autonomous Foreign Exchange Market decreased by 35.53 percent to $/1,304.72 in the first quarter of 2024, down from $/841.15 in the last quarter of 2023.

Businesses surveyed anticipate that the naira will continue to depreciate over the next three months, starting in July, but expect it to appreciate after six months.

The report indicated that respondent firms foresee a depreciation of the naira in the current month, the following month, and the next three months, with indices of -22.6 points, -16.5 points, -4.8 points, and 13.7 points, respectively, suggesting a potential rise in borrowing rates as confidence fluctuates.

The Central Bank of Nigeria (CBN) has reported a significant increase in remittance inflows, which reached $553 million in July 2024, marking a 130% rise compared to July 2023.

The central bank attributed this growth primarily to recent policy measures designed to enhance liquidity in Nigeria's foreign exchange market.

These measures include granting licenses to new international money transfer operators and implementing a willing buyer-willing seller model, facilitating timely access to naira liquidity for IMTOs.

Analysts from Meristem Research expressed a positive outlook, suggesting that remittance inflows are likely to maintain their upward trend, bolstered by these policies and further strategic initiatives aimed at stabilizing the foreign exchange market.