The aforementioned figure surpassed the previous record of $857 million established on March 28, signifying a day marked by elevated trading activity and liquidity. To provide context, the typical daily turnover for the month of October amounted to $245 million.
On Friday, trading concluded with the Nigerian Naira valued at N1,678/$1. The persistent strong demand for the dollar contributed to the observed increase in supply.
Closing Exchange Rate: The Naira closed at N1,678/$1 on Friday, maintaining the all-time high close established the previous day.
Intraday Highs and Lows: The day's intraday high reached N1,698/$1, while the low was N1,609/$1. The previous day's intraday peak was N1,700, and the low was N1,635.
These elevated levels sustained over the past two days indicate persistent pressures within the foreign exchange market.
Parallel Market Rate: The parallel market rate experienced a significant increase, reaching N1,730/$1, as reported by Nairametrics on Friday. This widening disparity between the official and parallel market rates highlights the growing exchange rate discrepancy driven by heightened demand.
Market Turnover: The $1.403 billion turnover recorded on Friday represents the total foreign exchange traded, indicating a substantial surge in market activity.
Market turnover serves as an indicator of the volume of foreign currency transactions within a trading day, with higher turnover typically indicating enhanced liquidity as market participants engage more actively.
Currency Trends: Throughout 2024, the naira has been under significant depreciation pressure, influenced by rising inflation and fiscal imbalances.
The exchange rate has plummeted by an astonishing 45% this year, positioning it among the poorest performing currencies worldwide. The notable fluctuations in the exchange rate over the past few months reflect ongoing fiscal and economic challenges that are complicating the Central Bank of Nigeria’s (CBN) monetary policy measures.
For example, the recent spike in turnover indicates a concerted effort to boost forex supply in response to the persistent demand for dollars, particularly from importers and independent traders. The central bank has reported a significant rise in remittances from the diaspora, which have doubled to $600 million monthly, suggesting that supply is beginning to gain traction.
The significant increase in Forex Turnover on Friday can be attributed to an upsurge in demand for dollars from businesses and investors facing urgent financial requirements.
This surge in activity seems to be a combination of CBN interventions and market-driven transactions aimed at stabilizing the naira amid its ongoing depreciation. Analysts point out that the naira's falling value is encouraging traders to purchase dollars in anticipation of further declines, a trend that could intensify demand if not addressed.
In addition, the central bank has recently seen a surge in funds due to new foreign-denominated bond sales and increased forex inflows from crude oil, which has had a positive impact on reserves. The rise in forex turnover can also be attributed to the CBN's efforts to incentivize corporations with export capabilities to repatriate their forex holdings into the official market.