Foreign exchange activity on Nigeria’s official market took a sharp hit on August 11, with Nigerian Foreign Exchange Market (NFEM) turnover plunging to about $185 million, its lowest level in 11 weeks. Data from the Central Bank of Nigeria (CBN) showed that turnover dropped dramatically from $646.51 million recorded the previous day, highlighting a sudden slowdown in trading activity.
The latest figure represents a decline of roughly $461.5 million in a single trading session. The number of deals also fell sharply, dropping to 186 from 348 on August 10, while interbank transactions plunged from 182 to just 47. The naira, meanwhile, closed weaker at N1,365 per dollar, compared with N1,361.50 the previous day, after trading within a range of N1,361 to N1,365.50.
What makes the drop particularly notable is how quickly FX activity has swung in recent weeks. NFEM turnover had climbed above $1.24 billion on August 7, before falling to $878.55 million and then $460.14 million in the following sessions. The latest $184.99 million turnover is the lowest since May 25, when the market recorded $175.34 million. The sharp swings suggest that while the naira has remained within a relatively narrow range, the level of activity behind that stability has been far less consistent.
Global market developments are also adding another layer of uncertainty. Investors remain focused on US inflation, interest-rate expectations and rising geopolitical tensions, while higher oil prices continue to influence currency markets. Brent crude rose to about $89.69 per barrel amid renewed tensions around shipping routes in the Middle East. For Nigeria, developments in the oil market are especially important because crude exports remain a major source of foreign exchange earnings.
Despite the weaker FX turnover, Nigeria’s external reserves continued to build, rising by about $198 million in the first eight days of August to $52.141 billion as of August 10. The latest slowdown also comes after a strong week for the FX market, when total turnover reached $3.73 billion for the week ended August 7. With the CBN maintaining a tight monetary policy stance and the Monetary Policy Rate at 26.5%, market participants will be watching closely to see whether the sharp drop in NFEM turnover is temporary or signals a more sustained cooling in dollar trading activity.
source: nairametrics
