In a remarkable turn of events, the Naira made substantial gains on Monday, surging by 2.5 percent, while the dollar fell to a new low of N1,170 on the parallel market.
During Monday’s trading session, the dollar was quoted at N1,170, marking a stark contrast to the N1,200 exchange rate observed on the previous Friday.
Just days earlier, the Naira had hit a record low of N1,310 against the dollar due to heightened demand on the parallel market, often referred to as the black market. However, it has rebounded impressively.
Traders attribute the recent appreciation of the Naira to various government-announced policies that have left speculators uncertain.
The government’s initiatives aim to digitize foreign exchange transactions, discouraging speculative demands and the hoarding of foreign exchange in cash.
The foreign exchange (FX) market concluded the past week on a positive note, with the Naira displaying strength against the dollar across various market segments.
On a daily basis, the Naira witnessed a remarkable appreciation of 5.68 percent. This translated to the dollar being quoted at N789.94 on Friday, a considerable drop from N837.49 on the preceding Thursday, as reported by data from the Nigerian Autonomous Foreign Exchange Market (NAFEM), monitored by FMDQ.
The FX market observed substantial dollar flows from both buyers and sellers eager to engage in transactions.
As a consequence of these developments, the daily foreign exchange market turnover, reflecting the volume of transactions, surged by an impressive 129.50 percent. It reached $259.84 million on Friday, compared to $113.22 million on the prior Thursday.
Nigeria’s economic landscape is witnessing a significant shift as the Naira gains ground against the dollar, further bolstered by government policies aimed at enhancing stability and reducing speculative pressures in the FX market.
