Naira kicks off July strong, as Forex transactions rise 95% in H1, 2022

Nigerian currency kicked off the month of July with a marginal gain, but pressure from forex scarcity and the Joe Biden administration interest hike provided a bleak future.

On Friday, July 1 data from FMDQ securities showed that at the Investors and Exporters window, the official foreign exchange market, the Naira appreciated by a marginal 5 kobo or 0.01 per cent to N425.00/$1 from the previous day’s N425.05/$1.

This happened as there was an ease in pressure-demand which resulted to a total value of transactions at $78.86 million just 2.9 per cent or $2.22 million higher than the $76.64 million reported on Thursday.

Also, at the interbank segment, the local currency strengthened against the Pound Sterling by N5.26 to N500.65/£1 from N505.91/£1 and against the Euro, it gained N3.56 to sell at N434.03/€1 compared with Thursday’s rate of N437.59/€1.

It was the same outcome at the parallel market on Friday, as the Naira gained N5 or 0.82 per cent on the greenback to trade at N607/$1 compared with the previous day’s rate of N612/$1.

Read also: Naira falls heavily to US dollar at official markets amid low FX supply

However, the value of the Nigerian currency at the Peer-2-Peer (P2P) window to its American counterpart depreciated by N6 or 0.98 per cent as it was traded at N619/$1 compared with the preceding day’s N613/$1.

Meanwhile, the total volume of dollars traded (turnover) from January to June 30 by investors and exporters rose by 95 per cent, year-on-year (YoY) to $20.23 billion in the first half of the year (H1’22) from $10.34 billion in H1’21.

FMDQ data published over the weekend showed that on a quarterly basis, turnover fell by 30 per cent to $8.33 billion in the second quarter of 2022 (Q2’22) from $11.9 billion in the first quarter of 2022 (Q1’22).

On a month-on-month basis, the trading volume showed consistent fluctuation through the entire half-year, 2022.

Turnover stood at $3.22 billion in January but fell by 33.8 per cent to $2.13 billion in February.

In March, it rose by 207 per cent to $6.55 billion, only to fall again by 59 per cent to $2.63 billion in April.

This trend continued in May when turnover fell by 4.9 per cent to $2.5 billion. The trend was reversed in June as turnover rose 28 per cent to $3.2 billion.

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