The Nigerian naira appreciated for the third consecutive day, closing at N1,596.52/$1 on the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday. This marks the second time this month that the exchange rate has dipped below the N1,600 threshold, showcasing a steady improvement in the value of the local currency.
According to data from the Financial Markets Dealers Quotations (FMDQ), the naira’s recent appreciation coincides with a decrease in nationwide protests against hunger and poor governance. The currency has been gradually gaining strength throughout the week, starting with a 0.62% increase to N1,607.15/$1 on Monday, followed by a 0.38% rise to N1,601/$1 on Tuesday, and finally closing at N1,596.52/$1 on Wednesday, reflecting a 0.28% gain.
This three-day streak of appreciation is the first since May 2024, highlighting a period of relative stability for the naira. However, the market has still exhibited volatility, with the naira trading between a high of N1,628/$1 and a low of N1,520/$1.
In parallel with the naira’s strengthening, foreign exchange (FX) turnover on the official market saw a significant increase for the first time this week. After experiencing a decline in daily average turnover earlier in the week, FX turnover rose by 51.73% to $93.92 million on Wednesday, following a Retail Dutch Auction by the Central Bank of Nigeria (CBN). The auction, which aimed to alleviate demand pressure in the FX market, saw the CBN selling $876.26 million at N1,495/$1 to 26 qualified banks.
This auction, the largest conducted under the leadership of CBN Governor Yemi Cardoso, reflects the ongoing efforts by the CBN to stabilize the naira and manage demand in the FX market.
