Liquidity challenge in the foreign exchange market has continued to worsen foreign investors' participation in the equities market as foreign transactions declined by 60 per cent to ₦62.18 billion in half year , 2023.Liquidity challenge in the foreign exchange market has continued to worsen foreign investors’ participation in the equities market as foreign transactions declined by 60 per cent to ₦62.18 billion in half year , 2023.
However, foreign inflows have continued to stagnate in the equities market, plummeting by approximately 69 per cent to ₦21.79 billion in the first half of the year, while inflows from local institutional investors rose by approximately 13 per cent in H1, 2023 to ₦461.78 billion. For the week ended June 30, 2023, the average Nigerian Autonomous Foreign Exchange Fixing rate was $/₦751.98, compared to $/₦729.98 recorded in the weekended June 23, 2023, representing a depreciation of the Naira against the dollar by 2.93 per cent .
“Manufacturers will grapple with amplified costs and potential profitability challenges, while households may need to adapt their spending patterns, thereby affecting businesses reliant on consumer demand,” it stated. “Households, in turn, will encounter higher fuel prices resulting from the elimination of the subsidy. This will have indirect implications for transportation expenses and the overall cost of living. The increased fuel costs may influence the prices of essential goods and services, potentially exerting inflationary pressures.”