FX market turnover surges by 75.2% on increased trading

The average turnover at the Nigerian Foreign Exchange Market (NFEM) increased by 75.17 per cent to US$296.16 million in the fourth quarter of 2024, compared with US$169.07 million in the third quarter (Q3) of 2024, reflecting increased trading activities in the market.

The Central Bank of Nigeria (CBN) disclosed this in its economic report for the fourth quarter 2024.

The average exchange rate of the naira per US dollar at the NFEM stood at N1,623.26/US$, compared with N1,588.64/US$ in Q32024. This represented a 2.13 per cent depreciation of the exchange rate at the NFEM during the review period, owing to increased demand pressure.

The Chinese renminbi and the Russian ruble depreciated by 0.42 and 11.21 per cent, respectively, compared with the preceding quarter. The depreciation of renminbi was largely driven by market anticipations of impending US tariff policies, while continued Western sanctions on Russia impacted the ruble. In contrast, the South African rand appreciated by 0.22 per cent, supported by improved economic indicators that enhanced investors’ confidence.

According to the report, the economy recorded a higher net foreign exchange inflow, driven largely by inflow through autonomous sources. Foreign exchange inflow through the economy increased by 20.62 per cent to US$27.81 billion from US$23.06 billion in Q32024.

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Inflows through the Bank decreased by 4.05 per cent to US$11.54 billion from US$12.03 billion, while autonomous sources rose by 47.55 per cent to US$16.27 billion from US$11.03 billion in the preceding quarter.

Foreign exchange outflow through the economy rose by 31.37 per cent to US$10.42 billion, relative to the level in Q32024. Outflows through the Bank and autonomous sources at US$8.99 billion and US$1.43 billion, increased by 22.98 per cent and 129.59 per cent over the respective levels in the preceding quarter.

Consequently, net foreign exchange inflow through the economy increased by 14.99 per cent to US$17.39 billion from US$15.13 billion in the preceding quarter. An increase was also recorded in net inflow through autonomous sources to US$14.84 billion from US$10.40 billion in the preceding quarter. A net inflow of US$2.56 billion was recorded through the Bank, compared with a net inflow of US$4.72 billion in Q32024.

The external reserves increased and remained above the benchmark of three months of import cover during the review period. The external reserves rose to US$40.19 billion, from US$39.29 billion at the end of September 2024. This level of reserves could cover 8.15 months of import for goods and services or 12.00 months for goods only.

A breakdown of the external reserves by ownership showed that the shares of the CBN and the FGN stood at US$33.95 billion and US$6.24 billion, respectively, while the Federation accounted for the balance. A disaggregation showed the continued dominance of the US dollar (US$31.94 billion or 79.48%), followed by Special Drawing Rights (US$4.14 billion or 10.31%), Chinese yuan (US$3.27 billion or 8.14%), the euro (US$0.55 billion or 1.37%), and the British pound (US$0.28 billion or 0.70%). Other currencies accounted for the balance.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.