The naira appreciated against the dollar in both the official and parallel foreign exchange markets, closing the week on a positive note as FX supply increased.
According to data from FMDQ, the naira strengthened to ₦1652.62 per dollar on Friday, an improvement from ₦1658.57 per dollar recorded on Thursday.
This represents a gain of ₦5.95 in the official market within a single day.In the last 48 hours, the naira has seen a cumulative gain of ₦35 against the dollar, signaling a rebound in the local currency’s performance.
This trend was also evident in the black market, where the naira firmed to ₦1750 per dollar on Friday, improving from ₦1755 per dollar the previous day.
The appreciation in both markets reflects a growing supply of foreign exchange and improved sentiment.
The uptick in FX supply was evident in the rise of transaction turnover in the official market. On Friday, FX transaction turnover increased significantly to $243.05 million, up from the $163.66 million recorded on Thursday.
This 48.5% surge in turnover highlights improved liquidity and market activity, which contributed to the naira’s recovery.
Despite the positive developments in recent days, a week-on-week analysis shows a marginal depreciation of the naira in the official market. Compared to last Friday’s exchange rate of ₦1652.25 per dollar, the naira lost ₦0.35, highlighting some lingering pressure on the local currency.
Nevertheless, the recent gains provide optimism for sustained recovery in the coming weeks.In the broader economic context, the Central Bank of Nigeria (CBN) reported an increase in the country’s external reserves, which rose to $40.277 billion as of November 20, 2024.
This marks a critical development, as higher reserves bolster the CBN’s ability to intervene in the FX market and stabilize the naira.
The naira’s improved performance can be attributed to several factors, including increased FX inflows, a more active interbank market, and efforts by financial authorities to boost dollar supply.
These efforts have eased pressure on the naira, particularly in the parallel market, where speculative activities had previously driven rates higher.
As Nigeria continues to address challenges in its FX market, the recent appreciation offers hope for a more stable exchange rate regime.
Market analysts, however, caution that sustaining this momentum will require consistent policy measures, increased foreign investment inflows, and further improvements in economic fundamentals.
