NAFEX sheds $217.57m turnover in one week

The Nigeria Autonomous Foreign Exchange (NAFEX) window has dropped not less than a whopping sum of $217.57 million in one weektrading, as the Nigerian currency, Naira, fell against Pound sterling and the Euro at the parallel market segment of the Foreign Exchange (Forex) market, data obtained from FMDQ OTC has revealed.

The Importer & Exporters FX window, otherwise known as NAFEX recorded a decline weekly turnover of $954.76 million, significantly weaker than $1172.33 billion declared the previous week, indicating a total drop of $217.57 million.

This was despite operated for good five working days, compared to the preceding week four days operation, due to Federal Government declaration of Mon 2, October as public for the nation’s 57 independent holiday.

However, the breakdown of the NAFEX transactions on the first trading in the week under review was seen at $207.26 million, dropped to $86.69 million on Tuesday but was stronger on Wednesday at $240.54 and gained further to close at $252.56 on Thursday and but unfortunately dropped on the last trading in the to $169.71 million, putting the weekly turnover figure at $954.76 million.

It would be recalled that the autonomous FX window at the end of the preceding week trading, declared a whopping sum of $1.172 billion just in four trading days, with the first trading day of that week at $340.07 million, but dropped the following day to $257.56, however, changed that positively on Thursday with an appreciable daily turnover of $367.44 million before rapping that week up with $207.26.

However, the local currency had traded at 478 to the pound last Monday but rebounded the following day to close at 475, gaining five points and was sustained for better part of the week, before relapsing on the last trading day of the week to close at 480 at the parallel market segment of the forex market.

The Naira, also, suffered slightly against the Euro to close on the last trading day of the week at 425 compared to 421 sold in the preceding week at the unofficial forex market. On the hand, the Nigerian legal tender, sustained its gaining streak against the US Dollar to close at 363 for the second week running at the parallel market.

At the official forex market, the Naira, had being on the steady growth while comparing the Monday traded figure of 305.60 with 305.10 exchanged on Tuesday but relapsed to 305.55 the following day, which was retained on Thursday before closing the week at a stronger rate of 305.50.

It is however, worthy of note that the Central Bank of Nigeria (CBN) has sold not less than $3.47 billion in the third quarter in its continued effort in ensuring stability and liquidity in the official foreign exchange market. Even though, the overnight lending rate on Thursday dropped to 20 per cent on expectation that a cash squeeze will ease after money market rates more than doubled previous session.

It is however, worthy of notes that the Central Bank of a Nigeria (CBN) has kept liquidity tight to support the currency, leaving its benchmark interest rate on hold at 14 per cent this year. The apex bank, also aims to keep rates high to attract foreign inflows into its bond market to boost dollar liquidity.

For instance, the overnight rate closed at 44 per cent on Wednesday after banking system liquidity hit a debit of 265 billion naira. But tight liquidity continued on Thursday with the market in debit of 243 billion naira although the central bank repaid some treasury securities.