In a surprising twist, Nigeria’s Naira strengthened by an impressive 9.64%, defying a dip in dollar liquidity at the official market. Closing Monday’s trading session, the dollar stood at N837.77, a remarkable improvement from Friday’s N927.19, as per FMDQ data.
This boost in the Naira’s value can be attributed to a moderation in dollar demand at the official foreign exchange (FX) market. Willing buyers and sellers set a bid rate of N1,021, surpassing Friday’s N,160/$1, indicating heightened interest in spot trading. The lower bid rate held steady at N701 per dollar on the spot.Monday witnessed a decrease in dollar supply, with the daily foreign exchange market turnover dropping by 32.87% to $73.93 million, compared to Friday’s $110.14 million.FSDH Research’s equity research note highlighted the NAFEM’s increased activities, fueled by attractive interest rates in the money market, potentially luring trade investors into Nigeria. Post-FX reforms, the average NAFEM turnover rose to $114.8 million, up 5.2% from pre-FX reform levels. November’s average turnover of $140.9 million signaled a resurgence, although it remains below the pre-COVID peak of $250 million.Analysts at FSDH research emphasized the need for stable oil prices and sustained crude oil production to attract foreign investor interest in Nigeria’s capital market. The Naira’s recent surge is a promising sign, yet sustained foreign investment hinges on a robust economic foundation.
