The Nigerian official market for foreign exchange (FX) is currently experiencing high volatility, with turnover falling by 75.98% to a three-week low of $92.68 million on Thursday, down from $385.91 million at the close of trading on Tuesday ¹. This significant decline, which represents the second such crash in recent weeks, indicates ongoing challenges and uncertainty in Nigeria’s foreign exchange market.

The value of the naira also depreciated slightly, standing at N1,476.24/$1 on June 6, 2024, and trading in a wide range of N1,400/$1 to N1,500/$1 on Friday, highlighting the market’s responsiveness to supply and demand dynamics.

This crash in FX turnover is the second since June 6, 2024, when Afrexim Bank announced the disbursement of $925 million- another tranche of the $3.3 billion crude oil-backed loan agreement it entered into with the Nigerian National Petroleum Company Limited (NNPC) last year.

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The bank disclosed this in a statement on its website stating that the current disbursement brings the total payment for the facility to $3.175 billion.

The bank explained that the current payment was raised from crude oil off-takers like Oando Group and Sahara Energy as well as others.

In tandem with the FX turnover crash, the latest data from the FMDQ reveals that on June 6, 2024, the naira stood at N1,476.24/$1, reflecting a 0.17percent decrease from the previous rate of N1,473.66/$1 on the NAFEM window.

This depreciation, although seemingly minor in percentage terms, indicates ongoing pressures on the naira amidst a fluctuating foreign exchange market.

The local currency closed at the rate of N1,482.72 to the dollar at the official market on Friday, compared to Thursday’s N1,500/$1 and a low of N1,400/$1. This wide trading range highlights the significant volatility within a single trading day, reflecting market responses to varying supply and demand dynamics.

Such fluctuations are common in an environment where external economic factors, policy announcements, and global market trends impact currency stability.

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