Indications that Nigeria’s monetary authorities’ reforms to improve the Naira exchange rate against foreign currencies at the foreign exchange (FX) markets are yielding the desired results have emerged as the local currency strengthened on Wednesday and traded at N1,394/$1 in the official market.
The day’s exchange rate of the Naira represented its strongest performance since May 29 2024 when it traded at N1,329.65/$1
Available data obtained from the Central Bank of Nigeria’s (CBN) website, which showed exchange rate trend at the Nigerian Foreign Exchange Market (NFEM), showed that the Naira strengthened from N1,409.5/$1 it exchanged at the preceding day.
The appreciation of the local currency’s exchange value marked a halt to the recent volatility that had characterized its performance at the official FX window in recent weeks.
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However, despite the gains the local currency recorded in exchange with the foreign currencies at the official market, it traded at N1,490/$1, just marginally stronger than the N1,491/$1 it traded on Tuesday.
The data from the two FX markets on Wednesday showed that the gap between the official and parallel market rates widened to N96, suggesting that demand pressures and speculative transactions continue to weigh more heavily on the parallel market.
