The naira ended the week on a positive note, appreciating by N40.49 in the official foreign exchange (FX) market on a week-on-week basis, despite a significant drop in currency transaction volumes. Data from FMDQ Securities Exchange Limited shows a 2.5% increase in the value of the naira, closing at N1,600.78 per dollar on Friday, October 18, compared to N1,641.27 the previous week. This marks a considerable improvement over the trading week.
On a day-to-day basis, the naira gained 3.73%, closing at N1,600.78 on Friday, up from N1,660.49 on Thursday. However, the currency’s intraday performance saw some volatility, with the naira hitting a low of N1,592 on Friday, slightly worse than Thursday’s low of N1,540.
Despite the naira’s appreciation, market turnover in the official FX space plummeted by 43.13%, dropping from $616.73 million on October 11 to $350.72 million on October 18. However, daily turnover slightly improved by 6.2%, from $330.18 million on Thursday to $350.72 million on Friday.
Meanwhile, in the parallel market, the naira depreciated by 1.2% on a week-on-week basis, with the dollar trading at N1,720 on Friday, compared to N1,700 since October 10, 2024.
The naira’s volatility continues amid broader concerns about its performance in 2024. The World Bank’s latest Africa’s Pulse report identified the naira as one of Sub-Saharan Africa’s worst-performing currencies, having depreciated by approximately 43% since January 2024.
Despite currency reforms, including the liberalisation of the official exchange rate in June 2023, Nigeria’s efforts to stabilise the naira have struggled to ease the mounting pressure on the currency, primarily due to high demand for dollars from various sectors. The situation underscores the challenges Nigeria faces in managing its complex currency market, even as the naira shows some resilience in the official FX market.
