The naira strengthened by N8 against the US dollar at the Nigerian Foreign Exchange Market (NFEM) on Tuesday, recording its biggest single-day gain since August.
The currency closed at N1,357/$, improving from N1,365/$ on Monday as it recovered some of its recent losses, according to data from the Central Bank of Nigeria (CBN).
The appreciation followed a volatile trading period in the second half of October, during which the naira weakened from N1,337/$ on October 21 to N1,365/$ on October 22 and N1,370/$ on October 23, before recovering to N1,365/$ on October 26.
During Tuesday’s session, the exchange rate fluctuated between N1,344/$ and N1,368.50/$, while the weighted average rate stood at N1,352.87/$.
Interbank foreign exchange transactions recorded 197 deals, with a combined turnover of approximately N543.74 million. The simple average exchange rate was N1,355.83/$.
The latest gain represents the currency’s strongest daily appreciation since August 17, when it rose by N8.25 to close at N1,350/$, from N1,358.25/$ on August 14.
In the parallel market, the naira traded between N1,380 and N1,385/$ on Tuesday, according to Bureau De Change operators in Abuja. The dollar traded at around N1,385 on Monday.
The difference between the official and parallel-market rates persisted, with the dollar commanding a premium in the informal market.
A BDC operator, Adamu Isha’q, attributed movements in the parallel market to changes in foreign exchange demand and supply, noting that limited dollar availability amid strong demand tends to push rates higher.
Meanwhile, Nigeria’s foreign reserves have risen above $55 billion, reaching their highest level in more than 18 years, according to the CBN.
The reserves provide an external buffer for the economy, although the naira’s performance continues to depend on foreign exchange supply, demand and broader market conditions.
Despite Tuesday’s recovery, the currency remains subject to volatility, with the latest appreciation reversing only part of its losses earlier in the month.
