Naira plunges against dollar despite increased forex liquidity

The naira finished lower against the dollar last week despite the increase in liquidity on the official foreign exchange market, according to data from Lagos-based securities exchange FMDQ.

The average Nigerian Autonomous Foreign Exchange Fixing rate was N1,623.99/$, compared to N1,608.85/$ in the previous week.

The total turnover in the FX spot and derivatives markets rose to 12.1 percent to $1.21 billion from $1.08 billion in the previous week.

FMDQ said: “The week-on-week (WoW) increase in total turnover was solely driven by the 12.73% ($136.48 million) increase in FX Spot turnover, which recorded a total value of $1,208.23 million, compared to $1,071.75 million recorded in the week-ended September 6, 2024, offsetting the 100.00% ($5.30 million) decrease in FX Derivatives turnover.

“The WoW decrease in FX Derivatives turnover was solely driven by the 100.00% ($5.30 million) decrease in FX Forwards turnover, coupled with the ongoing lack of activity in both the Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards markets