The foreign exchange (FX) market in Nigeria experienced a notable 56.58% decrease in dollar supply on Wednesday, following a surge in liquidity just two days prior, attributed to interventions by the Central Bank of Nigeria (CBN).
Banks and key market players sold a total of $117.87 million on Wednesday, significantly lower than the $271.50 million recorded the previous day, indicating a sudden shortage in supply.
Consequently, the Nigerian naira depreciated by 0.29%, with data from the FMDQ Exchange showing the dollar quoted at N1,503.38 on Wednesday, compared to N1,499.07 on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM). Market dynamics revealed a closure at an intraday high of N1,582 per dollar, reflecting a weakening from the N1,550/$1 closure observed on Tuesday. Conversely, the intraday low appreciated to N922.38 on Wednesday, indicating strength compared to the N1,000 quoted in spot trading the previous day.
The fluctuations highlight the challenges faced by market participants and underscore the need for effective monetary policies and interventions to stabilize the exchange rate and ensure market liquidity. T
Source: Business Day