The official foreign exchange (FX) market in Nigeria witnessed a notable surge in dollar liquidity on Tuesday, leading to a strengthening of the naira. According to data from the Financial Markets Dealers Quotations (FMDQ), the Nigerian Naira gained 3.71% against the dollar, trading at N806.73 compared to N837.77 on Monday at the Autonomous Foreign Exchange Market (NAFEM).
The significant increase in dollar liquidity was reflected in a remarkable 92.92% rise in the daily FX market turnover, reaching $142.63 million on Tuesday, up from $73.93 million recorded the previous day.
Willing buyers and sellers participated in the market, quoting the dollar at a bid rate of N1,150, which was slightly weaker than the N1,021 quoted on Monday in spot trading. The spot segment recorded a lower bid rate of N757 per dollar, also weaker than the N701/$1 on Monday.
This positive movement follows Monday’s surprising strengthening of the naira by 9.64%, despite a decline in dollar liquidity. The appreciation of the naira was attributed to a moderation in the demand for dollars in the official FX market.
The increased liquidity and strengthened naira signal a positive turn in the foreign exchange landscape, offering potential relief to businesses and individuals engaged in international transactions. Market analysts are closely monitoring these developments to assess the sustainability of the trend and its impact on the overall economic landscape.
The Nigerian economy has faced challenges in recent times, including fluctuations in the foreign exchange market. A stable and strengthened naira could contribute to economic stability and confidence, potentially attracting foreign investment and promoting overall economic growth.
As the situation evolves, stakeholders are keenly observing the foreign exchange dynamics and any further developments that may influence the currency’s performance in the coming days.