Naira plunges as FX market liquidity drops
The naira weakened at a faster pace against the dollar this week on the official market as liquidity declined.
The average Nigerian Autonomous Foreign Exchange Fixing rate closed at ₦824.73/$ as against ₦801.15/$ last week, representing a depreciation of the naira against the greenback by 2.86 percent, according to FMDG Group.
In the FX spot and derivatives markets, the total turnover fell by 12.73 percent to $541.91 million from $620.93 million.
The decline in the total turnover was jointly driven by the 10.97 percent ($64.90 million) and 47.82 percent ($14.12 million) decreases in FX spot and derivatives turnover, respectively.
FMDQ said the decrease in FX derivatives turnover was solely driven by the 47.82 percent decrease in FX forwards turnover, whilst there was no activity in both Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards markets.
“In the FX spot market, the total value of transactions for the week-ended November 3, 2023, was $526.50 million, representing a decrease of 10.97 percent ($64.90 million) from the value of transactions executed in the week-ended October 27, 2023 ($591.40 million),” it added.
