The Nigerian Naira saw a notable appreciation against the US Dollar in the foreign exchange market on Thursday, buoyed by a rise in foreign exchange supply. Data from the Financial Market Dealers Quote (FMDQ) platform revealed that the Naira strengthened to N1644.86 per dollar, marking a significant improvement from the N1660.83 exchange rate recorded on Wednesday. This represents an appreciation of N15.97 within a single trading day.
The positive movement in the official exchange rate coincided with a surge in FX transaction turnover, which climbed to $560.34 million on Thursday.
This was a sharp increase compared to the $337.03 million recorded on Wednesday, highlighting heightened activity in the foreign exchange market.
However, the parallel market, commonly referred to as the black market, showed no change during the same period.
The Naira remained flat at N1750 per dollar, maintaining the same rate as observed on Wednesday.
The stability in the black market exchange rate contrasts with the volatility often seen in recent months and underscores the growing disparity between official and unofficial market rates.
The improvement in the official exchange rate follows the Central Bank of Nigeria’s (CBN) recent measures aimed at addressing the persistent currency fluctuations and dollar scarcity in the economy.
The apex bank’s latest intervention involved the introduction of the Electronic Foreign Exchange Matching System (EFEMS), a platform designed to enhance transparency and efficiency in the FX market.
One of the key provisions of this system is the pegging of minimum trade transactions at $100,000, a move expected to attract larger players and stabilize the market.
Despite these efforts, the Naira’s value has been subject to significant fluctuations over the past months, driven by factors such as limited dollar supply, speculative trading, and macroeconomic pressures.
While the recent appreciation provides a glimmer of hope for market participants, analysts warn that sustaining this positive trend will require consistent policy interventions and improved dollar inflows into the economy.
The disparity between the official and parallel market rates remains a pressing concern, with the gap currently at over N100. Analysts have called for further reforms to unify the exchange rates and restore investor confidence.
The CBN’s ongoing FX interventions, alongside increased transaction volumes, suggest that efforts are being made to address these challenges, though it remains to be seen whether the current momentum can be maintained in the weeks ahead.
The Naira’s improved performance on Thursday reflects the delicate balance of market forces and policy interventions shaping Nigeria’s foreign exchange market dynamics.
