The naira hit a significant high by closing day on Monday after recording a 10.71% appreciation (N1,339.33/$1) on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window.

The appreciation is the highest that the naira has attained since April 26, when the rate stood at N1,339.23/$1, according to data from FMDQ.

It is also the biggest currency appreciation since May 20, when it stood at 12.84%.

As of Friday, May 24, 2024, the exchange rate stood at N1,482.81/$1, with a minor appreciation of 0.19%.

The minor increase was recorded after the naira snapped off its winning streak of four days.

On Friday, the FX turnover was significantly higher ($556.25 million), representing an increase of 231.99%.

FX turnover’s massive increase could be attributed to the Central Bank of Nigeria’s aggressive strategy on liquidity management. CBN raised a significant N1.16 trillion from the OMO bill auction.

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It was a move from the CBN to control pressure from inflation and also stabilize the naira amidst the harsh economic realities of Nigeria.

On Monday, the FX turnover recorded a sharp decrease of 67.50%, which amounted to $180.8 million.

The significant drop in FX turnover means that there is a lower demand for dollars, which is also partly responsible for the appreciation of the naira.

When buyers purchase fewer dollars, the demand for them decreases, resulting in a stronger naira.

Over the past month, the Nigerian foreign exchange reserve has recorded a significant increase. As of May 23, 2024, the foreign reserve had approximately increased by $630.1 million.

CBN’s latest data disclosed a steady upward increase in the reserves, which proves the country’s resilience in attaining financial stability amidst the economic uncertainties.

The CBN was urged by the Monetary Policy Committee (MPC) to pay strong attention to improving the external reserve.

According to a part of an MPC communiqué that was released at the closure of its 295th meeting, “The Committee also noted the marginal increase in the external reserve balance between March and April 2024 and urged the Bank to sustain its focus on accretion to reserves.” 

In a bid to maintain a steady flow of foreign exchange into the country, the CBN has made plans to double the remittance inflow in 2024.