The Nigerian Naira showed signs of strength against the US dollar in the official market, closing the week at N1,469.97/$1.
Despite ongoing demand pressure that has been eroding the value of the country’s currency, the Naira appreciated marginally by 0.71% at the end of the week.
This increase represents a gain of N9.5 or a 0.71% rise compared to the previous day’s closing rate of N1,479.47.
Data from the NAFEM, where forex is officially traded, revealed that the intraday high reached N1560/$1, while the intraday low was N996/$1, indicating a wide spread of N564/$1.
Forex turnover at the close of trading was $253.77 million, representing a 21% decrease compared to the previous day.
In the parallel forex market, where forex is sold unofficially, the Naira also appreciated marginally, with the exchange rate quoted at N1,485/$1, reflecting a 1.01% increase compared to the previous day’s rate of N1,500/$1.
The Great British Pound remained flat at £1/N1,890, while the Naira gained 0.95% against the Euro, closing at N1585/EUR1.
Market analysts attribute the current state of the Naira to a consistent increase in the demand for dollars since the beginning of January.
This heightened demand is driven by businesses seeking to replenish their inventory or procure raw materials, as well as individuals pursuing education abroad who need foreign exchange to cover tuition fees and other expenses.
The Central Bank of Nigeria (CBN) has announced significant reforms in the foreign exchange market, signaling a move towards a market-driven exchange rate mechanism.
Recent circular from the CBN outlines changes such as the discontinuation of caps on interbank foreign exchange transactions and the lifting of restrictions on the sale of interbank proceeds.
These reforms aim to promote a market-based price discovery system and ensure more flexibility in exchange rates determined by market forces.
This article was updated 3 weeks ago