The Nigerian naira ended the week on a high note, gaining N59.71 against the US dollar on Friday, October 18, 2024.
According to FMDQ data, the naira strengthened to N1600.78 per dollar, up from N1660.49 the previous day. This significant appreciation follows a three-day depreciation streak.
Friday’s foreign exchange transactions reached $350.72 million, surpassing Thursday’s total of $330.18 million. This increase in FX activity contributed to the naira’s recovery.
Over the past week, the naira has experienced a mixed performance, appreciating twice and depreciating three times at the official FX market. However, at the parallel market, the naira fell to N1725 per dollar on Friday, down from N1705 the previous day.
Central Bank Governor Olayemi Cardoso recently highlighted the benefits of a weak naira, stating that it can be advantageous with sufficient investment in the country. Despite the bank’s interventions, the naira has continued to fluctuate against the dollar in recent months.
Analysts expect the naira to trade within its current band, barring any economic shocks. Some experts argue that the naira’s appreciation is not sustainable without improvements in economic fundamentals ². Others suggest that Nigeria needs a temporary dollar liquidity bridge or FX inflows to support the Central Bank’s orthodox reforms.
