The Nigerian naira experienced a modest recovery on October 3, 2024, as increased dollar supply in the official market played a significant role.
Data from the Nigerian Autonomous Foreign Exchange Market indicated that the naira appreciated by 0.60%, closing at N1,659.26 per US dollar, a recovery from N1,669.15 recorded the previous day. This improvement follows a hefty 8.25% decline the prior day, where the naira had dropped to N1,669.15 from N1,541 at the end of September.
Since its fall below N1,600 in July, the naira has encountered ongoing market volatility, oscillating between N1,500 and N1,600 as it seeks stability amidst fluctuating dollar valuation.
Foreign exchange turnover surged by 147.66% on Thursday, jumping from $181.86 million to $450.39 million, marking the highest single-day turnover since May 24, 2024, when $556.25 million was recorded. This increase in liquidity is credited with the naira’s slight appreciation, providing momentary relief for a currency that has struggled in recent months.
Throughout September, the naira’s price movements appeared stagnant as it fought to regain equilibrium amidst turbulent market conditions. Despite the uptick in dollar supply providing a glimmer of hope, the currency remains under pressure.
During a recent press briefing following a monetary policy committee meeting in Abuja, the Governor of the Central Bank of Nigeria highlighted the need for a diversified foreign exchange strategy. He emphasized the limitations of the current monolithic economy in achieving a robust exchange rate.
The governor also pointed to the Dangote Refinery as a pivotal development that could potentially revitalize Nigeria’s dollar-deprived economy. He noted that sourcing petrol from the $20 billion refinery could alleviate foreign exchange pressures, leading to a broader positive impact on the economy.
