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The Central Bank of Nigeria (CBN) has reported a significant increase in the average foreign exchange (FX) turnover, which grew by 180.47 percent over the past year, reaching $240.64 million by the end of February 2024. This marks a substantial rise from the $85.80 million recorded in February 2023.
The details were disclosed in the CBN Economic Report for February 2024, released on Tuesday.
On a month-to-month basis, the average FX turnover in the official window surged by 131.59 percent in February, up from $103.91 million in January. This increase reflects heightened trading activities in the foreign exchange market during the reviewed period.
The CBN noted that between January and February, the Nigerian economy experienced a higher net inflow, driven primarily by increased inflows through both the Bank and autonomous sources.
“Foreign exchange flows through the economy resulted in a net inflow of $6.45 billion, compared to $2.40 billion in January. A breakdown revealed a net inflow of $4.99 billion from autonomous sources and $1.46 billion through the Bank.
“Aggregate inflow into the economy rose by 80.45 percent to $8.86 billion, up from $4.91 billion in the preceding month. Inflow through the Bank increased by 127.97 percent to $3.26 billion, from $1.43 billion in the prior month. Autonomous inflow grew by 60.92 percent to $5.60 billion, from $3.48 billion. Aggregate foreign exchange outflow decreased by 4.74 percent to $2.41 billion, down from $2.53 billion in the previous month.
“Autonomous outflow rose to $0.56 billion from $0.47 billion in January. A net inflow of $2.56 billion was recorded through autonomous sources, compared to $2.97 billion in January. The CBN registered a net inflow of $0.075 billion, as opposed to a net outflow of $0.46 billion in the preceding month,” the CBN stated.
In a June interview with Bloomberg TV, CBN Governor Olayemi Cardoso revealed that Nigeria recorded a total foreign exchange inflow of about $24 billion in the first quarter of 2024.
During the reviewed period, the naira depreciated relative to the US dollar, which the CBN attributed to the ongoing effects of market liberalization.
The average exchange rate of the naira per US dollar at the Nigerian Foreign Exchange Market depreciated by 37.28 percent to N1,505.30/$ in February, from N944.08/$ in the previous month.
Meanwhile, the FMDQ Securities Exchange Limited reported in its monthly review for May that the spot foreign exchange market turnover rose by 25.23 percent to $11.42 billion (N16.36 trillion) in May 2024, compared to $9.12 billion in April 2024.
According to FMDQ, the official platform for the Nigerian Autonomous Foreign Exchange Market, “In the FX Market, the Naira depreciated against the US Dollar, with the spot exchange rate ($/N) increasing by 13.32 percent ($/N191.21) to close at an average of $/N1,435.87 in May 2024 from $/N1,244.66 in April 2024.”
In May, exchange rate volatility increased as the naira traded within a range of $/N1,173.88 – $/N1,533.99, compared to $/N1,072.74 – $/N1,419.11 in April 2024.
At the close of trading on Wednesday, the naira stood at N1,581.65/$ against the US dollar, with a daily turnover of $108.16 million.
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