September 03, (THEWILL) – Nigeria’s volatile currency market turnover climbed to $1.88 billion in August from $1.71 billion in the previous month, reflecting a 1.8 percent increase in 23 trading days.
However, the market turnover for August 18, was not tracked.
The highest turnover was $170 million recorded on August 30 while the least amount was $44,43 million on August 3.
The forex market has been battling with scarcity of dollar since the new government introduced a new regulation as part of the reform to reposition the economy
Analysts at Proshare reports that Nigeria’s external reserves dropped by US$915 milllion post-exchange rate aggregation.
The CBN aggregated all the exchange rate windows into the I&E window on June 14, when the reserves stood at US$34.66bn, and has dropped to US$33.73bn as of August 25, 2023.
Analysts suspect the reserve depletion was due to the continuous currency intervention since the CBN still operates a floating managed peg exchange regime, external debt servicing for Q2 2023 and the lower FX inflow from oil exports.
The country has struggled to meet the OPEC oil production quota in the past few years, robbing the opportunity to benefit from the elevated oil prices, which should shove up the reserves. The severe FX shortage has made the naira maintain a depreciation trend, N915/US$ as of August 28, 2023, at the parallel market and hovering above N700/US$ at the official rate.
“The country’s focus should be tilted towards improving oil and non-oil exports to boost FX supply in the interim. Once the FX inflow improves, the outrageous speculative FX demand, pulling down the naira, should wane”, the company said in a note to their clients.
