Naira ends weaker against dollar in first week of 2023

The Nigerian currency weakened further against the dollar in the official foreign exchange market this week, closing at N461.01/$ on Friday.

The total turnover in the FX spot and derivatives markets fell by 32.09 percent to $406.39 million this week from $598.41 million last week, according to FMDQ Group.

“The week-on-week decrease in total turnover was solely driven by the 42.75 percent ($217.60 million) decrease in FX spot turnover despite the 28.62 percent ($25.58 million) increase in FX derivatives turnover,” it said in its weekly FX market report.

FMDQ said the increase in FX derivatives turnover was majorly driven by the 1,338.28 percent increase in FX forwards turnover, which offset the 56.60 percent decrease in FX futures turnover.

It said the total value of transactions in the FX spot market for the week was $291.44 million, representing a decrease of 42.75 percent from $509.04 million last week.

In the FX futures market, $36.42 million worth of FX futures contracts were traded in four deals this week, representing a decrease of 56.60 percent when compared to the $83.91 million FX futures contracts traded in seven deals last week, according to the report.

“For the week ended January 6, 2023, the average Nigerian Autonomous Foreign Exchange Fixing rate was $/N461.01 compared to $/N459.92, recorded in the week ended December 30, 2022, representing a depreciation of the Naira against the United States dollar by 0.24 percent ($/N1.09),” FMDQ said.