In a turn of events, the Nigerian Autonomous Foreign Exchange Market (NAFEM) witnessed a significant 56% decline in transaction value, plummeting from $465.29 million on Tuesday to $203.93 million on Wednesday, as reported by FMDQ Exchange on Thursday.
Analysts attribute this downturn to a surge in demand for dollars, resulting in a challenging landscape for currency exchange.
Echoing these sentiments, Abdulahi Taura, a Bureau De Change operator, stated, “The dollar has increased to N1,480. People are still demanding it and that’s why it’s increasing.”
The Central Bank of Nigeria’s recent directives aimed at enhancing transparency in FX trading, coupled with measures to compel banks to sell excess dollar holdings, initially spurred a steady increase in FX transactions.
However, the sudden reversal underscores the complexities facing Nigeria’s currency market.
Ibrahim Yahu, another BDC operator, highlighted, “Our consistent thirst for the dollar is making it rise gradually against the naira.” This sentiment reflects the ongoing challenges in stabilizing the exchange rate amidst persistent demand for foreign currency.
Moreover, at the parallel market, the naira depreciated by 1.4% against the dollar, trading at N1,480/$, further exacerbating concerns about currency devaluation.
The official market also witnessed a weakening naira, closing at N1479.47/dollar, compared to N1434.53/dollar recorded the previous day.
The downward trend in forex turnover over the last two days has raised alarms, with transaction values dwindling from $584 million on Monday to $203.93 million on Wednesday. Despite efforts to foster transparency and liquidity in the FX market, challenges persist, underscoring the need for concerted efforts to address Nigeria’s currency woes.