FX TURNOVER DECLINES 44.9% TO $2BN

Foreign exchange turnover in Nigeria’s official market fell by 44.9 per cent to about $2 billion, reflecting a decline in trading activity during the period.

The reduction indicates weaker transaction volumes in the foreign exchange market compared with the previous period, as market participants adjusted to changing demand and supply conditions.

Analysts said lower turnover could be linked to reduced demand from some market participants, changes in foreign exchange liquidity, and adjustments following recent reforms by the Central Bank of Nigeria.

The decline comes amid continued efforts by the CBN to improve transparency and efficiency in the official foreign exchange market.

Market operators said foreign exchange activity remains influenced by the availability of dollars from exporters, foreign investors, remittances, and other sources.

They noted that stronger and more predictable foreign exchange inflows would be important to maintaining liquidity and reducing volatility in the market.

Businesses continue to require foreign currency for imports, international payments, equipment purchases, and other legitimate transactions.

Analysts said reduced turnover does not necessarily indicate a permanent decline in foreign exchange demand, as activity can fluctuate based on market conditions and the timing of major transactions.

They urged the government to continue policies that encourage non-oil exports and attract foreign investment to strengthen dollar inflows.

Stakeholders also called for consistent foreign exchange policies and improved market confidence to encourage greater participation by businesses and investors.

The decline in turnover highlights the changing dynamics of Nigeria’s foreign exchange market as regulators continue to implement reforms aimed at improving stability.

Analysts said sustained liquidity, transparent pricing, and stronger foreign exchange inflows would remain important to the long-term development of the market.