Market News

BY Nume Ekeghe

Trading activity at the Nigerian Foreign Exchange Market (NFEM) increased in August, with total turnover rising to $14.45 billion from $12.69 billion recorded in July, according to market data.

The August figure, however, covers the 19 trading days for which total NFEM turnover was available. The total turnover for August 31 had not been posted at the time of filing and was therefore not included in the monthly aggregation.

On the available data, NFEM turnover increased by $1.76 billion, representing a 13.8 per cent rise from the $12.69 billion recorded across 23 trading days in July.

Average daily turnover also increased substantially, rising to $760.43 million in August from $551.77 million in July. This represents an increase of about $208.66 million in average daily trading activity.

The strongest trading session in August was recorded on August 17, when NFEM turnover stood at $1.41 billion. This was followed by $1.25 billion on August 7, $1.11 billion on August 19, $1.08 billion on August 18 and $1.06 billion on August 27.

Other days with turnover above $900 million included August 20, with $920.46 million, and August 26, with $913.76 million.

The market also recorded several relatively low-turnover sessions during the month. Turnover stood at $184.997 million on August 11, the lowest available daily figure for the month, while August 14 recorded $352.34 million and August 13 recorded $387.09 million.

The increase in overall market activity was accompanied by higher interbank trading. Total interbank turnover rose to $3.99 billion in August from $3.39 billion in July, representing a 17.7 per cent increase.

Interbank activity averaged $199.68 million per trading day in August, compared with $147.55 million in July.

The highest interbank turnover during the month was recorded on August 17 at $437.53 million. This was followed by $393.48 million on August 7, $371.79 million on August 20, $370.98 million on August 19 and $364.71 million on August 18.

Interbank turnover was at its lowest on August 11 at $29.06 million. It was also relatively low on August 13 at $79.10 million and August 5 at $75.36 million.

The interbank segment accounted for about 27.6 per cent of the $14.45 billion total NFEM turnover recorded on the available August trading days.

The naira also strengthened over the course of the month. The currency closed at N1,365/$ on August 3, the first trading day covered in the data, before ending August 31 at N1,335.50/$.

This represents an appreciation of N29.50, or about 2.2 per cent, between the opening and final trading-day closing rates in the August data.

The naira’s weakest closing rate during the month was N1,365.10/$, recorded on August 6, while the strongest closing rate was N1,335.50/$ on August 31.

The market recorded a wider intraday range on the final trading day, with the naira trading between N1,320/$ and N1,343/$, while the closing rate was N1,335.50/$.

The August data also showed significant movement in the number of transactions. The available NFEM data recorded 6,029 deals during the month, while interbank transactions accounted for 2,837 of those deals.

The highest number of NFEM deals on a single day was 479 on August 26, followed by 425 on August 27 and 409 on August 12. August 11 recorded the lowest number of deals at 186.