In the month of January 2022, Nigeria recorded a forex turnover of $2.18 billion at the I&E window, where forex is formally traded, a 50.8 percent decrease from the $4.44 billion transacted in December 2021.
This is based on information from the FMDQOTC. The total amount bought and sold at Nigeria’s official forex market is represented by forex turnover at the FMDQOTC.
The $2.18 billion forex turnover in January, however, represents a 90.3% increase compared to the $1.15 billion recorded in the corresponding period of 2021.
However, the official exchange rate appreciated by 4.5% to close the month of January at N415.33/$1 as opposed to N435 to a dollar recorded as of the end of December 2021.
In 2020, Nigeria has endured FX shortages since the COVID-19 pandemic struck, leading to multiple devaluations of the local currencies while the Central Bank of Nigeria continues to intervene in the official market.
Nevertheless, Nigeria was able to raise $4 billion in 2021 through the issuance of Eurobond, which increased the country’s foreign reserve above the $40 billion threshold in October 2021, reaching a high of $41.83 billion as of 29th October 2021 before sliding downwards to $40.12 billion as of January 28, 2022.
Nigeria has been unable to regenerate its forex earnings through the sales of crude oil products, which accounts for about 90% of foreign exchange income, as a result of the inability to increase production quota despite the rally at the global market.