The Investors’ and Exporters’ (I&E) window of the official foreign exchange market experienced a staggering surge in foreign exchange (Forex) transactions, reporting an impressive 1,302.8 percent increase in one day.
This notable boost translated into a substantial monetary increase of $378.6 million in daily supply, based on data sourced from FMDQ Exchange.
On this day, the total forex transactions closed at an astounding $407.66 million.
This surge stands in sharp contrast to the $29.06 million in forex transactions recorded just the day before by the authorized dealers and their clients operating in the official market.
The increased supply of foreign exchange brought about a corresponding rise in the dollar exchange rate.
On this occasion, the naira weakened to N764.86, representing a depreciation of 0.74 percent compared to the previous day’s rate of N759.20.
The remarkable rise in forex supply can be attributed to the Central Bank of Nigeria (CBN) announcing its decision to intermittently inject foreign exchange into the official market.
In an official statement, the CBN revealed its intent to enhance liquidity in the Nigerian Foreign Exchange Market.
The central bank also expressed its intention to gradually reduce these interventions as market liquidity stabilizes.
This surge in forex supply is closely connected to the CBN’s concerted effort to address the backlog of foreign exchange, which, according to CBN Governor Yemi Cardoso, has played a part in the naira’s recent depreciation.