Increasing demand for foreign exchange (forex) by investors has been fingered for the negative performance of Nigeria’s local currency, Naira, last week.
A look at the performance of the Naira at the I&E window in the week showed that it depreciated week-on-week against the United States Dollar by 92 kobo or 0.22 per cent.
Specifically, the domestic currency was traded last Friday at N414.30/$1 as against the preceding week’s rate of N413.38/$1.
A breakdown showed that as the market opened on Monday, the Nigerian currency was exchanged at N413.55/$1 and the next day, it fell to N414.30/$1. The Naira further depreciated to N414.73/$1 on Wednesday before appreciating to N414.67/$1 on Thursday and the next day, it further appreciated to N414.30/$1.
Similarly, Naira maintained the outlook at the interbank segment of the market, as it fell marginally against the American greenback week-on-week by one kobo or 0.01 per cent. It was quoted N410.81/$1 last Friday compared with N410.80/$1 it traded at the preceding Friday.
The downtrend experienced during the week has been ascribed to rising demand in the face of limited supply.
The total transactions made at the Investors and Exporters (I&E) window of the foreign exchange (forex) market stood at $980.13 million last week, a rise of 13 per cent or $112.93 million compared to the turnover of $867.20 million recorded in the preceding week.
This is according to data obtained from the FMDQ Securities Exchange, which keeps records of transactions at the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX), a platform for forex activities in the I&E window.
It was observed during the week that an average I&E FX turnover of $196.03 million was recorded last week at the investors’ segment.
At the opening trading session of the week, the value of trades at the special FX segment stood at $108.83 million and it rose to $121.15 million the next day.
At the midweek trading session, the forex turnover significantly jumped to $266.32 million but went down to $124.35 million on Thursday before rising broadly to $359.48 million at the close of the week.
