The naira has shown signs of recovery against the dollar, appreciating in value at the official foreign exchange market on Thursday.
This change follows a rise in foreign exchange (FX) transactions, which have significantly boosted market activity.
According to data from FMDQ, the naira strengthened to N1659.26 per dollar on Thursday.
This represents an improvement from the previous day, where it closed at N1669.19 per dollar.
This means the naira gained N9.93 against the dollar in a single day.
The positive trend continued in the parallel market as well.
Here, the naira appreciated to N1680 per dollar on Thursday, a gain from N1690 per dollar on Wednesday.
This reflects a strengthening of N10 in the parallel market.
These gains mark a welcome change after the naira faced losses in the days prior.
Many traders and market analysts had expressed concern about the naira’s declining value in recent weeks.
A key factor contributing to the naira’s appreciation is the rise in foreign exchange transaction turnover.
On Thursday, the total daily FX transaction turnover soared to $450.39 million.
This is a significant increase from the $176.45 million recorded just a day earlier.
Such a substantial rise in transaction volume can help stabilize the naira and improve liquidity in the market.
The naira’s recent appreciation comes after a challenging period marked by sharp declines against the dollar.
In the past two days, the naira had recorded losses, creating uncertainty in the market.
Market participants had been worried that this downward trend could continue, affecting businesses and consumers alike.
However, the recent appreciation has provided a glimmer of hope for those dealing with foreign currency transactions.
The fluctuations in the naira’s value have direct implications for the Nigerian economy.
A stronger naira can reduce the cost of imports, benefiting consumers by lowering prices for imported goods.
It can also help stabilize inflation, which has been a growing concern in Nigeria.
Conversely, a weaker naira often leads to higher prices for imported products, affecting everyday life for Nigerians.
The recent gains may provide temporary relief, but economists caution that sustained improvements will depend on several factors, including consistent FX supply and effective economic policies.
The Central Bank of Nigeria (CBN) has been actively working to manage the naira’s value.
By implementing measures to increase FX supply, the CBN aims to stabilize the currency and reduce volatility.
These efforts have included interventions in the foreign exchange market and policies to encourage inflows of foreign capital.
Analysts believe that ongoing government initiatives to boost domestic production and export capacity can further strengthen the naira in the long run.
Traders and economists have welcomed the naira’s recent appreciation, viewing it as a positive development for the economy.
Many believe that sustained efforts to increase FX supply will be necessary to maintain this momentum.
