See How Low Naira Is Against Dollar At Official Market

Value of foreign exchange transactions recorded on the official Nigeria Autonomous Foreign Exchange Market has risen to $584m.

Gatekeepers News reports that according to data posted on the FMDQ Exchange on Tuesday, this represents a significant increase from the $440m daily transaction previously recorded on the platform.

This came as the national currency weakened against the US dollar at the official market on Tuesday.

Compared to N1419/dollar recorded on Monday, it closed at N1433/dollar on Tuesday.

However, the data from FMDQ Security Exchange indicated that the forex turnover increased to $584.53m on Tuesday from $440.13m recorded on Monday indicating an increase of $144.4m or 32.8 per cent.

The improved liquidity is following moves by the Central Bank of Nigeria to stabilise the foreign exchange rate.

Nevertheless, aside from commercial banks, the Central Bank of Nigeria, oil firms, and multinationals also sell dollars at the Nigerian Autonomous Foreign Exchange Market.

Last week, the CBN rolled out new circulars and guidelines to boost liquidity and narrow the gap between the parallel and official rates of the foreign exchange market.

The apex bank in its most significant foreign exchange guideline, last week, ordered banks to adjust their FX exposures.

The CBN’s circular titled, “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks”, expressed worry over the growing trend of banks holding large foreign currency positions.

It said, “The Central Bank of Nigeria has noted with concern the growth in foreign currency exposures of banks through their Net Open Position. This has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks.”