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Major Banks Sell over $3Billion as Naira Approaches ₦1,700/$ Exchange Rate

Deposit Money Banks increased their trading activities through the Nigerian Autonomous Foreign Exchange (NAFEM).

FMDQ Securities, where the Naira is officially exchanged, reported a total transaction volume of $3.83 billion from February 2 to February 16, 2024.

The improved liquidity at NAFEM followed a mandate from the Central Bank of Nigeria, which instructed banks to liquidate surplus dollar stock in order to increase liquidity in the Forex market.

Commercial banks, the Central Bank of Nigeria, and foreign oil companies are the most active forex sellers at NAFEM.

According to Punch, the banks led others in selling $1.97 billion in accordance with CBN directives.

The sales breakdown is as follows: On Monday, February 5, 2024, a total transaction of $584.53 million was recorded.

On Tuesday, February 6, 2024, it was lowered to $465.29 million. On Wednesday, February 7, 2024, the turnover was lowered to $209.93 million. On Thursday, February 8, 2024, turnover rose to $321.23 million.

The turnover for Friday, February 9, 2024 was $253.77 million.

From Monday, February 13 to Friday, February 16, the FX supply began at $116.11 million. It climbed by $292.3 million, reaching $381.92 million.

On Wednesday, the supply decreased to $117.87 million. On Thursday, the supply rose to $336.11 million. On Friday, total supplies fell to $84.10 million.

Despite increased supply, the Nigerian currency saw significant losses in both official and underground markets.

On Friday, February 16, 2024, the official market exchange rate for the Naira was N1,537.96 against the USD.

Over the weekend, the Naira fell to N1,658.3/$ on the peer-to-peer market, while black market merchants sold the dollar at N1650.

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