The Nigerian naira saw a slight recovery on Thursday, October 3, 2024, as dollar supply in the official market surged significantly.
According to data from the FMDQ, based on daily trades on the Nigerian Autonomous Foreign Exchange Market, the naira appreciated by 0.60%, closing at N1,659.26 per US dollar, compared to N1,669.15 on October 2, 2024.
This follows a significant depreciation the previous day, when the naira closed at N1,669.15, marking an 8.25% drop from N1,541, the rate recorded on the last trading day of September.
Since the naira fell below the N1,600 threshold in July, it has faced persistent market volatility, fluctuating between N1,500 and N1,600 in its quest for stability, especially during periods of dollar weakness.
FX turnover on Thursday soared by 147.66%, rising from $181.86m to $450.39m, marking the largest single-day turnover since May 24, 2024, when $556.25m was recorded.
This increased liquidity contributed to the naira’s marginal appreciation, providing temporary relief to the currency that has struggled in recent months.
In September, the naira’s price movements stagnated as it attempted to regain balance amid the turbulent market conditions.
While Thursday’s rise in dollar supply offers a positive sign, the currency remains under pressure.
Speaking at a press briefing last week after the monetary policy committee’s 297th meeting in Abuja, the Governor of the Central Bank of Nigeria, Yemi Cardoso, said although the apex bank’s strategy is to unlock as many diversified sources as possible into the foreign exchange section, it is not enough and cannot replace the fundamentals.
The central bank governor said achieving a strong exchange rate would continue to be hampered as long as the country operates on a monolithic economy.
Cardoso also described the Dangote Refinery as a game changer, capable of turning around Nigeria’s dollar-starved economy.
He said that lifting petrol from the $20bn refinery would ease FX pressure, and the effect would spiral into an economy battling dollar shortages.