The Nigerian naira recorded further appreciation against the United States dollar on Wednesday, strengthening in both the parallel market and the Nigerian Foreign Exce Market, NFEM.
In the parallel market, the naira appreciated to N1,388 per dollar from N1,395 per dollar recorded on Tuesday, reflecting improved performance of the local currency against the dollar.
Similarly, at the official Nigerian Foreign Exce Market, the naira strengthened to N1,368.95 per dollar.
Data released by the Central Bank of Nigeria, CBN, showed that the indicative exce rate at the official market declined from N1,373 per dollar on Tuesday to N1,368.95 per dollar, representing an appreciation of N4.05 for the naira.
Following the improvement, the gap between the parallel market and the official market exce rates narrowed to N19.05 per dollar from N20 per dollar recorded the previous day.
The development also coincided with increased activity in the interbank foreign exce market. Reports showed that turnover in the market rose significantly by 75.3 percent to $130.6 million compared to $74.5 million recorded earlier.
Financial analysts attributed the naira’s appreciation to improved foreign exce liquidity, sustained interventions by the Central Bank, and growing confidence among market participants.
The narrowing gap between the official and parallel market rates is also being viewed as a positive signal for the country’s ongoing foreign exce reforms aimed at ilising the currency market and attracting investors.
Despite the recent gains, economists noted that demand pressure for foreign exce from importers and businesses remains a key factor that could influence future exce rate movements.
The Central Bank continues to implement measures targeted at improving liquidity, reducing volatility, and strengthening confidence in Nigeria’s foreign exce market.
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