Wednesday witnessed a remarkable surge in US dollar supply turnover at the official foreign exchange market, soaring by 51% to reach $240.72 million, coinciding with marginal gains for the Naira.
According to data from FMDQ, the FX turnover escalated from $117.32 million on Tuesday, marking a substantial $123.4 million increase by the close of trade.
This surge in supply had a tangible impact on the Naira’s value, with the local currency appreciating to N1,542.58 per US dollar on Wednesday, compared to N1,551.24 recorded on Tuesday.
Notably, this marks the second instance of appreciation for the Naira against the US dollar at the official foreign exchange market since the previous Thursday, highlighting a trend of strengthening for the Nigerian currency.
The uptick in US dollar turnover follows a similar pattern observed in recent sessions. Just the day before, Tuesday saw a surge of 76.61% in US dollar supply turnover, coinciding with an appreciation of the Naira.
However, the situation was somewhat different in the parallel market, where the Naira weakened to N1,860 per US dollar on Wednesday, down from N1,740.00 recorded on Tuesday.
Contrastingly, at Binance, a peer-to-peer market, the Naira experienced appreciation, climbing to N1,608 per US dollar on Wednesday from N1,936 on Tuesday.
This divergence in trends may be attributed to various factors, including reported access restrictions in Nigeria, influencing market dynamics.
These developments occur against the backdrop of recent enforcement actions by the Economic and Financial Crime Commission (EFCC), targeting illegal Bureau De Change operators across multiple states, including Abuja, Lagos, Kano, and Oyo.
The crackdown reflects ongoing efforts to curb illicit activities in the foreign exchange market, contributing to a more regulated environment.
In recent weeks, the Central Bank of Nigeria (CBN) has introduced several policy measures aimed at stabilizing the Naira amidst persistent fluctuations in the FX market. These measures underscore the authorities’ commitment to maintaining stability and restoring confidence in the Nigerian currency.
As the foreign exchange market continues to evolve, stakeholders remain vigilant, navigating through changing dynamics and regulatory interventions.
The surge in US dollar supply, coupled with the Naira’s gains, signifies a significant development in the ongoing efforts to manage currency fluctuations and promote economic stability.
