Nigeria’s FX Turnover Drops 51% as Dollar Trading Slows to $1.81bn

• Nigeria’s FX turnover fell by 51.29% in the week ended November 6, while the naira recorded only a marginal movement against the dollar.

Nigeria’s foreign-exchange market recorded a sharp decline in trading activity in the week ended November 6, with transactions falling to $1.81 billion from $3.71 billion the previous week.

The figures, attributed to FMDQ market data, represent a 51.29 per cent reduction in weekly turnover, equivalent to approximately $1.90 billion.

Average daily transactions between authorised dealers and their customers also declined, falling from $742.51 million to $361.67 million.

Most of the reduction came from the spot market, where currencies are exchanged for immediate or near-immediate delivery.

Spot transactions dropped to approximately $1.79 billion from $3.64 billion, accounting for about 97.3 per cent of the overall decline.

Trading in forward contracts, which provide for currency delivery at an agreed future date, also slowed. Weekly forward turnover fell by 69.93 per cent to $22.20 million from $73.83 million.

Despite the substantial reduction in transaction values, the naira’s movement was comparatively small.

Separate reporting put the currency at approximately ₦1,349 to the dollar on Friday, November 6, and around ₦1,350 on Monday, November 9. These are reported rates for those trading days, rather than a live quotation for November 10.

Foreign-exchange turnover measures the value of transactions completed within a specified period. It differs from the exchange rate, which indicates how much naira is required to purchase a dollar.

Consequently, the 51.29 per cent decline does not mean that the naira lost half its value. It also does not establish that Nigeria’s foreign reserves fell by the same amount.

The figures show a substantial weekly slowdown in trading. On their own, however, they do not establish its cause or demonstrate that the decline will continue.

For businesses and individuals monitoring the market, the immediate distinction is between reduced transaction activity and the comparatively limited movement in the reported exchange rate.