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Nigerians’ love for imported products pushes forex turnover to $14.53bn

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Capital importation into Nigeria drops by $790m, largest decline in over 2 years

In the first four months (January to April) of 2022, the volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the foreign exchange market rose to $14.53 billion.

This is a 201.5 per cent increase, year-on-year (YoY) compared to $4.82 billion in the corresponding period of 2021.

Ripples Nigeria analysis on monthly turnover from FMDQ securities where Naira is officially traded showed that $3.22 billion was traded in January followed by $2.13 billion in February.

For March and April, participants at the market traded $6.55 billion and $2.63 billion respectively.

The highest turnover of $6.55 billion in March represented a 336.6 per cent year-on-year (YoY) increase when compared with $1.5 billion traded in March 2021.

Meanwhile, analysts at FSDH Research in their April 2022 Macroeconomic review and outlook for Nigeria projected the average exchange rate of the naira per dollar to hit N430 by end of 2022.

Read also: Naira depreciates to US dollar at official market, despite increase in forex supply

They stated: “While the year to date performance of Nigeria’s exchange rate on the I&E window remains on the gaining side, the recent performance suggests increasing pressure on the currency.

“The exchange rate at the end of 2022 first quarter (Q1) appreciated by 4.3 per cent to N416.25/$ from N435/$ at the close of 2021 fourth quarter (Q4).

“However, the currency depreciated to N419.5/$ as at April 21, 2022, as a result of limited forex supply.

“The pressure on the naira intensified in the parallel market. The exchange rate reached N590/$ in April and revolved around N585– N590/$ from N565/$ at the beginning of 2022.

“The gap/premium between the I&E Window and the parallel market continues to expand. It increased to an average of N159.82/$ so far in the year, from N73.64/$ in Q1’2021.”

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