Naira Slides as Interbank FX Turnover and Deal Volume Surge

Naira Slides as Interbank FX Turnover and Deal Volume Surge

The naira weakened at the Nigerian foreign exchange market (NFEM) on Tuesday, after official data showed a simultaneous spike in interbank foreign‑exchange turnover and transaction volume.

U.S. dollar liquidity improved at the official window while demand for foreign payments rose, creating a fragile equilibrium that drove the naira lower despite tight intervention from the Central Bank.

Daily data from the regulator showed the spot rate slipping to N1,384.08 per U.S. dollar, down from N1,379.65 the previous session.

At the official window, forex trades were executed in a range of N1,381 to N1,386.99 per dollar, a stark reversal from the N1,378–N1,381.50 range observed the day before.

The local currency gyrated against the greenback amid a persistent foreign‑exchange liquidity squeeze at the official window, where total daily dollar volume hovered near $1 billion.

Liquidity data revealed that NFEM interbank turnover jumped to $243.09 million, a 182 % increase from the previous day’s $86.14 million.

Interbank transactions among banks and market makers rose to 140 from 85 reported on Monday, underscoring a surge in large‑scale wholesale currency trading.

Fluctuations in the NFEM window were driven by shifting FX supply and demand, but analysts kept a bullish view of the naira, citing gross external reserves edging toward $52 billion.

Robust foreign reserves bolstered market confidence, drawing foreign portfolio investors into Nigeria’s fixed‑income securities.

Data from the apex bank showed Nigeria’s foreign reserves rose to $51.845 billion at the start of the week, up from $51.769 billion the previous week.

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