By Elizabeth Adegbesan

The volume of dollars traded (turnover) in the Investors and Exporters (I&E) window of the foreign exchange market rose sharply by 201.5 percent, year-on-year (YoY), to $14.53 billion in the first four months of the year (January to April 2022) from with $4.82 billion in the corresponding period of 2021.

Vanguard analysis of data on monthly turnover from FMDQ showed that the $14.53 billion traded in the four months of 2022 comprises $3.22 billion in January, $2.13 billion in February, $6.55 billion in March and $2.63 billion in April.

The highest turnover of $6.55 billion in March represented a 336.6 per cent year-on-year (YoY) increase when compared with $1.5 billion traded in March 2021.

Meanwhile, the naira appreciated by NN16 kobo during the period as the indicative exchange rate of the window rose to N419 per dollar on April 29 from N435 per dollar on December 31st. However, the naira depreciated by N5 in the parallel market.

Analysis of data from black market traders showed that the indicative exchange rate rose to N585 per dollar on April 29, 2022 from N580 per dollar on December 31, 2021.

However, Analysts in the financial sector of the economy have projected further currency adjustment before the end of 2022 financial year due to external imbalances and tepid inflows.

Analysts at FSDH Research in their April 2022 Macroeconomic review and outlook for Nigeria projected the average exchange rate of the naira per dollar to hit N430 by end 2022.

They stated: “While the year to date performance of Nigeria’s exchange rate on the I&E window remains on the gaining side, the recent performance suggests increasing pressure on the currency.

“The exchange rate at the end of 2022 first quarter (Q1) appreciated by 4.3 per cent to N416.25/$ from N435/$ at the close of 2021 fourth quarter (Q4).

“However, the currency depreciated to N419.5/$ as at April 21, 2022 as a result of limited forex supply.

“The pressure on the naira intensified in the parallel market. The exchange rate reached N590/$ in April and revolved around N585– N590/$ from N565/$ at the beginning of 2022.

“The gap/premium between the I&E Window and the parallel market continues to expand. It increased to an average of N159.82/$ so far in the year, from N73.64/$ in Q1’2021.”