The naira rose against the US dollar at the Nigerian Foreign Exchange Market amidst a significant surge in interbank turnover, according to daily FX data published by the Central Bank of Nigeria.
Dollar liquidity improved above international payment levels after consecutive market pressures that pushed the local currency lower at the official window.
Daily FX data released by the Central Bank showed that the naira appreciated marginally by 0.09 per cent to close at N1,379.46/USD at the official window, from N1,380.7066 per dollar on Tuesday.
Trading data from the official trading platform showed the spot rate reached an intraday high of N1,386 and briefly touched an intraday low of N1,365 per dollar due to FX injection.
NFEM interbank turnover increased sharply on Wednesday, with data released by the Apex Bank showing $249.905m in transactions among institutions across 180 deals.
This indicates improved market liquidity and greater market confidence, leading to tighter bid-ask spreads across all foreign exchange deals.
In the parallel market, the naira was quoted at N1,395 per dollar, according to the channel check, suggesting a stable naira exchange rate on the day.
The naira hit N1,379 because the market is liquid but cautious. The surge in interbank activity shows that the system is working, but the “marginal” nature of the appreciation (0.09%) shows that the market has reached a price discovery equilibrium where both buyers and sellers are comfortable trading at the N1,300+ level.
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