The naira has appreciated to N1,278.58 against the United States dollar from N1,309.39 per dollar recorded last week Thursday. This indicates an increase of N30.81 at the close of trading activity.
According to data from FMDQ Securities, the indicative exchange rate for the Nigerian Autonomous Foreign Exchange Market closing below the N1,300 ceiling marks the first instance since January 26 of this year.
The naira depreciated to as low as N1,615/$1 on March 13, 2024.
Since the introduction of a slew of forex policies by the central bank, the naira has gained over 21 per cent on the dollar since March.
Liquidity in the forex market has been attributed to an array of policies currently implemented by the CBN.
Key reforms include the unification of exchange rate windows, liberalisation of the FX market, clearance of FX backlog obligations for banks and airlines, implementation of a Price Verification System, imposition of limits on banks’ Net Open Position, removal of the daily cap of N2bn on remunerable Standing Deposit Facility, and overhaul of the Bureau De Change segment.
Forex turnover is a critical metric in the financial world as it represents the total value of all foreign exchange transactions completed within a specific timeframe, providing insights into the liquidity and vibrancy of the forex market.
High turnover rates indicate a highly active market with numerous participants engaging in buying and selling currencies, which can signal investor confidence and economic stability.
A BDC operator at Wuse Zone 4, Ibrahim Yahu, stated, “The demand for dollars has gone down and the naira is appreciating because of the new rate determined by the CBN for traders.
The CBN initially started selling to us at N1,251 but they gave another rate last week Thursday at N1,190 and that is the reason for the new fresh drop in the dollar. The CBN selling directly to us has helped trading activities.”
Another trader, Malam Yunusa, stated that the naira was poised to maintain its gain against the dollar adding that operators also want the naira to grow.
