The value of foreign exchange turnover in Nigeria’s Autonomous Foreign Exchange Market surged to N15.74tn ($9.90bn) in August 2024, according to a report by FMDQ. This marked a significant 33.88% increase from July’s turnover of N13.23tn ($7.39bn), reflecting growing trading activity and foreign inflows. The Central Bank of Nigeria (CBN) revealed that foreign inflow into the country also rose to $585 million during the same month.
Despite the boost in turnover, the naira continued to depreciate, with the official exchange rate dropping to N1,658 against the US dollar on Tuesday, down from N1,659 the previous day. In the black market, the naira was trading at N1,700. The heightened exchange rate volatility reflects ongoing economic pressures and challenges in maintaining currency stability amidst rising demand for foreign exchange.
The FMDQ report attributed the increased turnover to heightened transactions in T-bills, OMO Bills, and FGN Bonds, though other bond transactions recorded an 18.43% decrease. However, the CBN auctioned $876.26m to end users in August in an effort to ease pressure on the naira, which temporarily strengthened to N1,596.52/$ following the auction. Manufacturing firms benefited the most, securing funds for importing key materials.
CBN Governor Olayemi Cardoso stressed that the naira’s value would not improve unless Nigeria addressed its dependence on a monolithic economy. He emphasized the need to diversify the economy, particularly through non-oil exports and import substitution, to achieve a sustainable and strong exchange rate. He also noted that Nigeria’s external reserves increased to $39.07bn, covering eight months of imports.