The naira, over the weekend, appreciated significantly against the United States dollar in the official foreign exchange market.
According to data from the FMDQ Securities Exchange, the naira closed at N1,558.75 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, September 13, 2024.
This figure marks a remarkable N91 improvement from the previous day’s exchange rate of N1,649.76 per dollar.
The naira’s strong performance comes on the back of rising expectations that the Dangote Refinery will soon ease the demand for foreign exchange in the country.
The refinery, which has commenced operations and is now lifting petrol for the Nigerian market, is anticipated to reduce Nigeria’s reliance on imported refined fuel.
This will significantly decrease the demand for dollars in the market, a factor that could help strengthen the naira in the coming months.
Analysts and industry experts have highlighted that local production of petroleum products will reduce the country’s forex demand, especially in the oil and gas sector.
The improvement in the naira’s value also follows the Nigerian government’s announcement of a successful domestic bond raise program earlier in the week.
The government had aimed to raise $500 million through its domestic bond program, but the initiative was oversubscribed by an additional $400 million, demonstrating considerable interest and confidence in Nigeria’s economy.
This influx of funds is expected to give the Central Bank of Nigeria (CBN) more capacity to intervene in the foreign exchange market and supply much-needed forex to stabilize the naira further.
An earlier report also revealed that Nigeria’s foreign exchange reserves increased by $490 million, providing the CBN with a stronger buffer to manage the foreign exchange market.
Despite the gains recorded by the naira against the dollar, the currency has shown mixed performances when traded against other major foreign currencies.
On Friday, the naira remained stable against the British pound, closing at N2,067.96 per pound, the same rate as the previous day.