In July 2023, amid the prevailing dollar scarcity in the economy, the volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the foreign exchange market experienced a significant 21% decline, dropping from $2.64 billion in June to $1.6 billion.
Weekly data from FMDQ showed that turnover started at $417.33 million in the first week of July, declined by 6.4% to $390.59 million in the second week, increased by 6.05% to $414.24 million in the third week, and then decreased by 4.13% to $397.11 million in the fourth week.
On the last day of July, the turnover stood at $67.21 million.
Despite this decline in the I&E window, the naira appreciated by N12.31, reaching N756.94 per dollar by the end of July 2023, compared to N769.25 per dollar on June 30th, 2023.
However, in the parallel market, the naira depreciated by N105, with the exchange rate rising to N870 per dollar by the end of July from N765 per dollar on June 30th, 2023.
The sharp decline in turnover in the I&E window indicates that the forex reforms introduced by the Central Bank of Nigeria (CBN) on June 14th, 2023, have not yet translated into increased foreign exchange inflow into the country.
However, the Acting CBN Governor, Mr. Ade Shonubi, has assured that the prevailing volatility of the exchange rate in the I&E window will soon be resolved, as the CBN will continue to intervene in the market to ensure stability.
Addressing the press at the end of the meeting of the Monetary Policy Committee, MPC in Abuja, Shonubi said:
“ We have started intervening and we have been doing it for a while and we will continue to intervene to bring the market to the level that we believe it should be. Right now and in the short run these volatile times are expected but we expect them to moderate sooner rather than later.”