The naira strengthened to a five-month high of ₦1,343.32 per dollar on Tuesday, gaining 0.46% from Monday’s ₦1,349.54 at the Nigerian Foreign Exchange Market (NFEM).
The move coincided with a sharp increase in official-market activity. NFEM turnover surged 301.18% to $1.41 billion on Monday from $352.34 million on Friday, while the number of transactions rose from 315 to 394.
The stronger official rate contrasts with relative stability in the parallel market, where the naira traded around ₦1,410 per dollar, leaving a roughly 5% gap between the two markets.
Nigeria’s external reserves also stood at $52.32 billion as of August 17, providing additional foreign-exchange liquidity and strengthening the backdrop for the naira’s recent appreciation.
For investors, sustained improvement in official-market liquidity and reserve accumulation could support greater exchange-rate stability and reduce some of the FX pressure faced by businesses with dollar-linked costs. However, the durability of the appreciation will depend on whether the increased official-market liquidity is sustained.
Investors should watch NFEM turnover, external-reserve levels, the official-parallel market spread and subsequent exchange-rate movements for signs of whether the naira’s latest gains represent a lasting improvement in FX liquidity or a temporary strengthening.
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