The naira strengthened across Nigeria’s foreign exchange markets on Wednesday, as increased trading activity in the official market and rising external reserves continued to support the local currency.
In the parallel market, the naira appreciated to N1,375 per dollar from N1,383 on Tuesday, gaining N8.
Similarly, the local currency strengthened in the Nigerian Foreign Exchange Market (NFEM), with the indicative exchange rate improving to N1,328 per dollar from N1,331 the previous day, representing a N3 gain.
The latest movements further narrowed the gap between the parallel and official markets to N47 per dollar, compared with N52 on Tuesday.
The reduction in the differential reflects the stronger performance of the naira in the parallel market as well as the improvement in the official market rate.
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Trading activity in the NFEM also recorded a significant increase, with interbank turnover rising by 181.5 per cent to $279.2 million, compared with $99.2 million recorded on Tuesday.
The sharp increase in turnover indicates substantially higher transaction activity in the official foreign exchange market.
Meanwhile, Nigeria’s external reserves have continued to strengthen, reaching $54.674 billion as of September 17, providing additional foreign exchange liquidity and supporting the outlook for the naira.
The combination of improved official-market liquidity, increased FX turnover and stronger external reserves has supported the recent appreciation of the naira across both markets.
If these conditions persist, the currency could maintain its recent gains in the coming weeks, although exchange-rate movements will continue to depend on foreign exchange supply and demand, market liquidity and broader economic conditions.
