Naira extends gain against dollar despite forex liquidity drop

The naira gained further last week despite the over 50 percent decline in liquidity in the foreign exchange market.

The total turnover in the FX spot and derivatives markets fell to $918.15 million last week from $1,948.68 million in the previous week, according to data from FMDQ, a Lagos-based securities exchange.

The average Nigerian Autonomous Foreign Exchange Fixing rate appreciated to N1,270.87/$ from N1,367.01/$.

The decline in the total turnover was driven by the 23.98 percent ($284.83 million) and 98.03 percent ($745.70 million) decreases in FX spot and derivatives turnover, respectively.

The WoW decrease in FX derivatives turnover was solely driven by the FX forwards turnover, while there was continued lack of activity in both the Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards markets, FMDQ said.

The total value of transactions in the FX spot market dropped to $903.15 million from $1,187.98 million.