Foreign exchange market turnover in Nigeria declined by 32.28 per cent in December 2024, falling to $9.74bn from the $14.39bn recorded in November.

This drop, highlighted in the FMDQ Exchange’s December Financial Markets Monthly Report, reflects the impact of ongoing foreign exchange market reforms and broader liquidity challenges.

The month-on-month decline of $4.64bn in FX turnover came at a time the Central Bank of Nigeria intensified efforts to stabilise the naira through various policy measures.

These reforms, which included interventions in the Nigerian Autonomous Foreign Exchange Market and new guidelines for FX inflows and outflows, influenced trading volumes across FX instruments.

The FX market was the most affected segment of Nigeria’s financial markets in December, accounting for 37.36 per cent of total spot market turnover.

This was lower than its 41.15 per cent share in November, reinforcing the downturn in trading activity.

Despite the drop in turnover, the naira appreciated against the United States dollar during the review period, with the average exchange rate strengthening to N1,564.97/$ from N1,667.41/$ in November.

This represents a 6.55 per cent (N102.44) appreciation of the local currency.

However, the report obtained by Saturday PUNCH on Friday, noted increased exchange rate volatility in December, with the naira trading within a range of N1,524.88/$ to N1,672.69/$, compared to N1,639.50/$ to N1,690.37/$ in November.

The widened trading band suggests heightened speculative activities and a cautious approach from FX market participants.

The report read, “Spot FX market turnover was $9.74bn (N15.32trn) in December 2024, representing a 32.28% ($4.64bn) MoM decrease from the turnover recorded in November 2024 ($14.39bn).


https://punchng.com/fx-market-turnover-drops-by-32-amid-reforms/