Drop in weekly forex liquidity drags naira lower

The naira extended its decline against the dollar last week as foreign exchange turnover in the official market fell by 1.16 percent.

The total turnover in the FX spot and derivatives markets dropped to $1.09 billion from $1.10 billion in the previous week, according to data from Lagos-based securities exchange FMDQ.

The average Nigerian Autonomous Foreign Exchange Fixing rate closed at N1,568.76/$, compared to N1,546.21/$ in the previous week.

The decrease in total turnover was jointly driven FX spot turnover, which recorded a total value of $1,089.75 million, compared to $1,102.39 million  and 16.82% decrease in FX derivatives turnover.

FMDQ said the decrease in FX Derivatives turnover “was solely driven by the 16.82% ($0.18 million) decrease in FX Forwards turnover, whilst there was continued lack of activity in both the Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards markets.”