Average daily forex turnover on FMDQ reached a yearly high of $294 million in November

Average daily forex turnover on the FMDQ platform for November reached $294 million, the highest level recorded so far this year.

This figure is based on Nairametrics’ analysis of last year’s forex turnover data as Nigerians continue to grapple with foreign exchange challenges.

Average daily forex turnover serves as a critical benchmark for the forex market, reflecting the level of liquidity in the official forex market.

What the data says

A closer examination of FMDQ data shows that the average daily forex turnover for November was $293.9 million and the exchange rate average was N1,667/$1.

• The next highest average daily turnover was recorded in March, at approximately $252 million per day.
• As we approached the end of the year, forex turnover showed a steady increase; The average turnover of October reached 245 million dollars, which is the third highest monthly figure of this year.
• This marks a significant improvement compared to the four-month period between June and September 2024, when average daily turnover remained below $200 million.

A record-breaking November

November started slowly; Average daily forex turnover in the first two trading days was only $94 million and $79 million.

• However, activity picked up significantly in the second week, driven by a record daily turnover of $1.4 billion on 8 November.
• This extraordinary trading volume is the main reason for the record performance in November.
• Remarkable trading activities were also seen in the last days of the month; A turnover of $425 million, $337 million and $560 million was recorded on November 26, 27 and 28, respectively.

Despite the increase in forex turnover in November, the gap between official and parallel market exchange rates widened to about N100.

Improving capital flows

The Central Bank of Nigeria (CBN) reported that foreign remittances in October increased from an average of $200 million to about $600 million per month, increasing liquidity in the market.

At the latest Monetary Policy Committee (MPC) meeting, the CBN acknowledged ongoing exchange rate pressures and emphasized the need for measures to increase market liquidity.

• However, members expressed concern about continued exchange rate pressure, reflecting continued high demand in the market. “Consequently, the Committee invited the Bank to explore measures to increase market liquidity.”

Despite these challenges, Nigeria has seen an increase in its foreign reserves, rising from $40.06 billion to $40.8 billion as of November 21, 2024. related to October.

This reserve level is enough to finance 17 months of imports.

Sunday closing: The exchange rate closed on 28 November at N1,644/1; The highest and lowest intraday levels were 1,701 N/1 and 1,557 N/1, respectively. Daily turnover was 560 million dollars.

• According to Nairametrics’ checks, the average exchange rate in the parallel market was N1,750/$1.

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