The naira, on Thursday, saw an improvement across both the parallel and official foreign exchange (FX) markets as demand for the U.S. dollar moderated amidst an ongoing currency shortage.
According to data from the Central Bank of Nigeria (CBN), the local currency appreciated by 0.85 percent, or N13, in the Electronic Foreign Exchange Matching System (EFEMS). The dollar was quoted at N1,532 on Thursday, compared to N1,545 the previous day.
Read also: Naira recovers by N25 in black market
In the parallel market, the naira also gained ground, trading at N1,680 per dollar on Thursday, a N30 improvement from the N1,715 recorded on Wednesday. This gain was attributed to a moderate demand for dollars, despite the continued presence of speculative activity in the black market.
Authorised currency dealers in the official market quoted the dollar at a high of N1,550 on Thursday, which was stronger than the N1,557 recorded the day before. Meanwhile, the market saw a lowest bid of N1,515, the same as on Wednesday.
Earlier this week, the naira had reversed its five-day winning streak on Monday, as increased demand for the dollar among end users led to a depreciation of the local currency across various segments of the FX market. This shift in demand dynamics had a noticeable effect on the naira’s performance.
Olayemi Cardoso, the governor of the CBN, commented on the broader trends in the FX market, revealing in November 2024 that the Nigerian Autonomous Foreign Exchange Market had seen a significant increase in its average daily turnover.
Read also: Naira plummets to N1,780/$1 as traders blame speculators
He noted that turnover had surged by 226 percent in the first half of 2024 compared to the same period in 2023. Additionally, foreign portfolio inflows had risen by more than 72 percent during this time. Cardoso also highlighted that Nigeria’s foreign exchange reserves had grown substantially, increasing from $32 billion in May 2023 to over $40 billion today. This rise in reserves is equivalent to eight months of import cover and represents the highest reserve level Nigeria has seen in nearly three years.
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