The Nigerian naira has shown significant strength against the United States dollar, nearing N1,000/$ at the parallel market and appreciating to N1,136/$ at the official market by the close of trading activities on Monday.

Traders have anticipated a further decline of the dollar to below N1,000 before the week ends.

According to data from the FMDQ Exchange, overseeing the Nigerian Autonomous Foreign Exchange Market, the naira surged by 6.1 per cent or N69 from N1,205/$ on Friday to N1,136/$ on Monday at the official foreign exchange market.

“The recent appreciation of the naira is a positive development and reflects the efforts of the Central Bank of Nigeria to stabilize the currency,” said a financial analyst, speaking on condition of anonymity.

The daily turnover slightly decreased to $251.60m on Monday from $281.34m recorded on Friday.

Improvement was also seen in the intra-day high, closing at N1,227 per dollar compared to N1,265 per dollar on Friday. The intra-day low strengthened by N100/$1, with the dollar quoted at N1,000 on Monday, up from N1,100 on Friday.

“The current exchange rate movement indicates a positive trend in the forex market, which is favorable for businesses and investors,” stated another analyst.

The increased rate follows a series of foreign exchange directives by the Central Bank of Nigeria (CBN) aimed at stabilizing the naira. Last month, the CBN announced the resolution of all valid foreign exchange backlogs, addressing inherited claims totaling $7bn.

Data from the FMDQ also revealed a 41.7 per cent increase in total inflows into the NAFEM, reaching $3.75bn compared to $2.64bn in February, the highest level since March 2019 ($6.07bn).

“The surge in inflows signals growing investor confidence in the Nigerian economy,” commented an economist at a local bank.

Last week, the CBN adjusted the exchange rate for Bureau De Change operators to N1,101 per dollar from N1,251/$1, with plans to sell $15.88m to 1,588 eligible BDC operators.

“We are committed to maintaining stability in the foreign exchange market and ensuring the competitiveness of the naira,” affirmed a spokesperson from the CBN.

Analysts at Afrinvest anticipate continued naira strengthening as the CBN intensifies efforts to bolster liquidity in the market.

However, at the unofficial market, traders at the Wuse Zone 4 market expressed concerns about the naira’s rates, stating that business was becoming less profitable.

“The fluctuating rates are affecting our profit margins and business operations,” lamented a currency trader.

Meanwhile, investment company Goldman Sachs Group noted the naira’s performance globally in April, projecting further gains due to effective policy management by the CBN, including interest rate increases during policy meetings in February and March.