The Nigerian Naira appreciated to ₦1,564.48 per dollar on Thursday, a 1.38% gain driven by increased dollar supply. Trading volumes surged by 61.54%, reflecting heightened market activity. The Central Bank of Nigeria's recent measures, including the Retail Dutch Auction System, aim to stabilize the foreign exchange market.
The Nigerian Naira experienced a notable appreciation on Thursday, closing at ₦1,564.48 per dollar in the official foreign exchange market, driven by a substantial increase in dollar supply. This marks a 1.38% gain from the previous day, when the Naira traded at ₦1,586.04.
Data from the FMDQ Securities Exchange Limited revealed that the volume of dollars traded surged by 61.54%, reaching $149.25 million on Thursday, up from $92.39 million on Wednesday. This boost in dollar availability has been attributed to heightened activity among market participants, who were eager to capitalize on the fluctuating rates.
Market dynamics throughout the week showed the dollar being quoted as high as ₦1,600 on Monday, while the lowest rate settled at ₦1,515 on Thursday, reflecting the volatility within the market.
In the parallel market, also known as the black market, the Naira also saw gains, closing at ₦1,595 per dollar, a ₦5 improvement from the previous day’s rate of ₦1,600. This suggests a broader trend of Naira strengthening across different segments of the foreign exchange market.
The Central Bank of Nigeria (CBN) has been actively involved in managing the foreign exchange market, although it did not conduct its regular retail Dutch auction on Wednesday. The CBN has recently introduced additional mechanisms to enhance transparency and liquidity in the market, including the Retail Dutch Auction System (RDAS). This system is designed to facilitate direct foreign exchange sales to end users, complementing other measures that have been implemented to stabilize the market.
The bank's efforts to bolster the Naira and attract foreign investment appear to be yielding results, with the recent influx of foreign portfolio investments contributing to the currency's appreciation. However, the CBN remains focused on long-term strategies to ensure that the exchange rate stabilizes at a market-determined level.
As the Naira continues to show resilience, market watchers are closely monitoring how these developments will influence Nigeria's broader economic landscape in the coming months.
