Turnover in Nigeria’s foreign exchange market jumped to the highest in a single day since 2017 on Thursday, as foreign investor dollars poured in.
Total trades on the day hit $857.78 million, according to data by FMDQ Securities Exchange.
Analysts say the days of $1 billion in daily trades are near. That’s after foreign inflows into naira assets surge following the Central bank’s 600 basis-point hike in one month, a move it took after allowing the naira trade freely.
Sources say the bulk of appetite at a Treasury Bill auction on Wednesday came from foreign investors. Foreign investors accounted for 75 percent of the demand at the previous auction on March 13, according to the CBN.
The naira took a breather on Thursday after hiring a three-month high the previous day.
A dollar sold for N1,309.39, slightly weaker than the N1,300.43 quoted on Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
The naira however strengthened to as high as N1,271/$ within the trading day.
In the past 11 trading days, the Naira has gained 28.07 percent (N365.07) of its value from N1,665.50 on February 23, 2024 to N1,300.43 as of March 27, 2024, according to the data from the FMDQ.
The naira has continued to appreciate as the US dollar sold at N1,280 on the parallel market at noon on Thursday following the recent foreign exchange (FX) policy measures of the Central Bank of Nigeria (CBN).
With the current rate, the naira has gained 2.34 percent of its value against the dollar in less than one day, from N1,310 the closing rate for Wednesday.
When compared to the level on February 20, 2024, the naira has gained 42.58 percent of its value against the dollar from a low of N1,825/$ on the parallel market.
The apex bank has in the last one month raised its benchmark interest rate, known as the Monetary Policy Rate (MPR) by 600 basis point to 24.75 percent.
